Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Both the Obama Administration and Congress have been focusing on revamping regulatory oversight for the rating agencies in recent weeks. Their motivation is obvious: there were several complex factors behind the credit market meltdown – including a breakdown in the rating agency process. The Treasury Department’s proposal, announced at the end of July, focuses on increasing transparency, eliminating the possibility of conflicts of interests and strengthening the SEC’s hand in oversight. To get an insider’s opinion of the potential changes, GlobeSt.com spoke with Robert Dobilas, the CEO of Realpoint, which this time last year joined the ranks of Nationally Recognized Statistical Rating Agency Organizations. As it turns out, he likes the administration’s plans to revamp the industry.

GlobeSt.com: The Administration’s plan is just one of many proposals. What do you think of some of the proposals put forth by Congress?

Dobilas: The Congressional proposals for regulation are falling way short of where they need to be – they are not focusing on the issues or problems, but instead focusing on liability and blame. That is what we like about the Treasury proposal – it is productive. It is the most positive policy position we have seen yet coming out of Washington.

GlobeSt.com: Can you give me some specifics about what you like in the Treasury plan?

Dobilas: It mitigates some of the key problems that helped lead to the current situation, like forum shopping by issuers. When this happens the rating agencies lower the risk threshold to gain market momentum for themselves.

GlobeSt.com: How does the plan rectify that?

Dobilas: By allowing that information and data be given to all NSROs so we can prepare our own independent analysis. That wasn’t in the original Treasury proposal but it sounds like it will be included in the revised version. This issue was one of the biggest areas of pushback from the industry and it is nice that the Administration is finally recognizing it.

GlobeSt.com: Is there anything in the Treasury proposal you don’t like? Such as the increased regulatory powers of the SEC?

Dobilas: Sure, there are some things we don’t agree with – although not necessarily that. But I would say our areas of disagreement are few and far between.

GlobeSt.com: What did you think of the S&P’s flip flop on the 2007 vintage CMBS ratings? First they announced they would downgrade hundreds of millions of dollars of these bonds – making them ineligible for TALF — then they changed their minds.

Dobilas: I have no comment on what their rational was. I will say that volatility like that is not healthy for the market, especially right now.

GlobeSt.com: What are your thoughts on the measures the government has been taken to jump start the credit and lending markets?

Dobilas: They are moving in the right direction – I think we will see more institutions in the next 60 days taking advantage of new CMBS issuance under TALF. I also think TALF has been instrumental in stabilizing spreads in the secondary markets.

GlobeSt.com: Is it enough or do you think other measures need to be put in place? The Real Estate Roundtable, for instance, is calling for a new facility to insure loan originations, in order to boost secondary trading.

Dobilas: Most likely we do need something more. We have a long way to go to fill the funding gap left by the securitization market crash.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.