The financial crisis starkly exposed the need for rating agency reform, yet the most important questions of how to enhance rating agency competition, accuracy, and accountability remain largely unanswered. The Dodd-Frank Act promised to overhaul the industry through sweeping reforms. But the Securities & Exchange Commission has struggled to implement the Act’s competing, if not contradictory, objectives: marginalizing ratings; exposing rating agencies to greater sunlight and private liability exposure; and treating rating agencies as a regulated industry.

I advocate a new approach to reform: breaking up the rating agency oligopoly. 

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