The repeal of Section 436(G) of the Securities Act of 1933  ---  what the Wall Street Journal in an article this morning called an “unintended consequence” of the Dodd-Frank Wall Street Reform and Consumer Protection Act  ---  is likely to open rating agencies to unprecedented liability for the quality of their ratings on ABS transactions, according to Barclays Capital analysts.

With difficulty assessing this new liability, Moody’s  Investors Service, Standard & Poor’s and Fitch Ratings have already pulled back from the new -issue securitization market. Barclays analysts expect this to impact consumer ABS more than residential credit ABS, where issuance volumes have been generally lower and issuance that has come to the market has generally been privately placed as 144A deals .

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