Regulators aim to require banks to do homework, not rely on ratings

06/21/2010 | AmericanBanker.com (free registration)

Regulators are striving to make banks prove that they are not substituting credit ratings for independent judgment. Officials are working on rules that would encourage financial institutions to do their own research. Banks that relied on ratings would be required to hold loss reserves covering the full value of the position. Those that did their own research would receive capital benefits.

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