House Oversight and Government Reform Committee to hold hearing Wednesday on rating agencies

By Cristal Cody

Tupelo, Miss., Oct. 21 - The U.S. House Committee on Oversight and Government Reform plans to hold a hearing Wednesday on the role of the nation's three largest rating agencies leading up to the current financial fallout.

The committee intends to discus the actions of Standard & Poor's, Moody's Corp. and Fitch Ratings in a hearing titled "Credit Rating Agencies and the Financial Crisis."

Witnesses expected to testify include Deven Sharma, president of S&P; Raymond McDaniel, chairman and chief executive of Moody's; Stephen Joynt, president and chief executive of Fitch; Sean Egan, managing director of Egan-Jones Ratings and former executives Frank Raiter of S&P and Jerome Fons of Moody's.

California treasurer Bill Lockyer, in a letter sent Tuesday, urged the committee to help end the agencies' system of holding municipal bonds to higher standards than corporate bonds.

The dual system has cost taxpayers billions of dollars in higher interest rates and bond insurance premiums, Lockyer said.

Moody's and Fitch had planned to restructure their municipal ratings scales but said earlier this month they would delay the change because of market turmoil. S&P has not said it plans to change its ratings structure.

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