How many company collapses have to happen before credit-rating agencies are finally held to account?

After Enron, Worldcom and Parmalat, the US Securities and Exchange Commission’s and the EC’s much-trumpeted clampdown on rating agencies, and their apparent inability to spot company credit problems before businesses collapsed, resulted in a wishy-washy code of conduct instead of legislation that would at least provide some recourse for investors.

And now Countrywide Financial is threatening to become the first big causality of the sub-prime home loan debacle — yet another financial disaster the rating agencies have failed to warn global markets about adequately.

Companies pay agencies thousands of pounds for a rating that provides reassurance for banks to lend billions of pounds to business.

There are plenty of people and companies that will have the finger of blame pointed at them as the sub-prime problems wash through the system, but rating agencies are there to give the market an early warning.

It is about time that regulators do away with a code of conduct and put in place hard and fast laws.

It might just return some credibility to an industry rapidly losing investor trust and respect.

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