Credit rating agency reform is actually required for the betterment of the quality of credit ratings on a global basis, for safeguarding the interest of common people and the investors at the same time. In fact, the introduction of the credit rating agency reform brought in a sense of clarity, responsibility, and competition within the worldwide credit rating industry.
To this effect, the American government formulated certain laws and acts. The U.S. Senate in the year 2006, passed an act by the name of “Credit Rating Agency Reform Act of 2006”. To the Senate, the American credit rating agencies are all assets of the nation. So, every part of their activities such as writings, analyses, making of credit reports and ultimately ratings must be guided by a set of rules and regulations, so that there are least cases of mistakes or frauds on the part of these agencies. In fact, the trade and commerce of the entire American nation relies heavily upon the performance of the existing credit rating agencies.
