The SEC held a roundtable discussion with the rating agencies at which various fixes and new regulations were discussed. The press reports indicate that most of it was the sort of self-serving blather that usually takes place at these events but one item indicated that they may be on to something.

The MarketWatch report of the meeting is pretty much what you would expect. Lots of talk about how to reform the ratings process, mostly focusing on rather improbable outcomes. There was, however, one fairly good idea kicked around.

Quit rating complex securitized products. Most of the participants seemed to think that this was a worthwhile idea and a couple admitted that the rating agencies didn’t understand the products and shouldn’t have been rating them all along. Now they tell us.

I didn’t see any mention of one of my pet peeves, namely the oligopolistic position that is conferred on certain rating agencies by the SEC. The Wall Street Journal had another editorial on this today. Until the industry opens up to new entrants and lets the market decide who and in what manner it wants to pay for analysis and ratings it’s output is going to be suspect.