Meredith Whitney Seeks to Launch New Credit Rating Agency
Whitney left her position at Oppenheimer early last year to open her own research company, Meredith Whitney Advisory Group. Now, she tells the Financial Times she plans to seek approval from the Securities & Exchange Commission to become a "nationally recognized statistical rating organization," a requirement for any company that intends to charge debt issuers for ratings that investors are able to use.
Credit rating agencies are blamed for contributing to the financial crisis by giving high ratings to risky structured debt products backed by U.S. mortgages. At least part of the trouble allegedly arose from the fact that the entities paying for the ratings were the same ones issuing the securities. Since then, rules have been established to better manage conflicts of interest. Whitney said that, with good business practices in place, she doesn't believe such conflicts will be a problem for her new agency.