The U.S. ratings agency Standard & Poor’s (S&P) is taking a number of steps to strengthen its ratings process in the wake of the global credit crunch and resulting stock market turmoil, including working with New York University’s Stern School of Business to develop an in-house certification program for its credit analysts, the Financial Times reported.
The new week-long program, which Stern will offer to S&P analysts in New York and London, will focus on skills such as financial statement analysis, advanced statistical analysis, valuation, derivative basics and credit scoring models, according to the FT report. It is one of 27 steps S&P is taking to strengthen its ratings process and rebuild its reputation after its methods were criticized by investors and regulators for leading to positive assessments of investments associated with risky subprime U.S. home loans.
“The overarching thing for us is that we’re working hard to restore confidence, but all of these are good business practices,” Pat Milano, chief operating officer at S&P, told the FT. Other measures include establishing an independent risk assessment oversight committee.
All S&P analysts will now be required to take the Stern course and pass an exam in order to act as a primary credit analyst. This is in addition to existing requirements that new primary credit analysts in the United States hold an MBA, a masters degree in finance or the Chartered Financial Analyst designation, the FT reported.
According to Stern finance professor Rangarajan Sundaram, the material in the course draws heavily from the lessons of this most recent economic crisis but is applicable to any economic circumstance.
Jaki Sitterle, managing director of executive programs at Stern, adds that many companies have begun to turn to business schools in the wake of the economic crisis to devise customized programs to help their employees learn from the meltdown.
“This is a big opportunity for executive education, because there is an increased need for financial literacy and . . . for employees to understand complex financial instruments,” she told the FT.
Read the full article: NYU’s Stern School of Business to Help Standard & Poor’s Develop In-House Credit Analyst Certification Program