The WSJ has an interesting article on a relatively new player to the bond rating game, Kroll. If you're asking yourself, is that the same Kroll that ran a global private security organization? Uh-huh. I think the world is ready for a little smackdown in sovereign debt ratings.
Jules Kroll created the newcomer, Kroll Bond Ratings Agency Inc., after selling his eponymous corporate investigations firm to insurance broker Marsh & McLennan in 2004. Mr. Kroll's new firm has provided financial strength ratings to banks and credit unions, among others, through a boutique ratings company, LACE Financial, that it acquired last August. Wednesday marks its first effort to rate individual securities through Kroll Bond Ratings.In a move distancing itself from given practices in the bond ratings game, Kroll plans to make use of his extensive expertise in corporate frisking to go beyond what he (and everyone else) feels are too lax standards in an industry that not only missed subprime, but helped pass the buck into our current mess. There may definitely be a new sherriff in town and his name, Kroll. Oh yeah, he'll also make use of K2 Consulting, a firm similar to Kroll's previous endeavor, run by his son.
We are embracing due diligence, the legacy from my prior lifeKroll 1, S&P/Fitch and any debt issuer 0.