Enron and other corporate meltdowns have put a big question on legendary reliability of credit rating agencies. Consequently, regulation of these unregulated private players that more or less operate like quasi--governmental bodies looks imminent.

Credit rating agencieste oligopoly of Standard & Poor's, Moody's and Fitch, together called NRSROs (Nationally Recognized Statistical Rating Organization) are in the hot seat for not responding quickly to the deteriorating financial status at Enron and WorldCom. The rating agencies did not downgrade Enron below investment grade till the energy major's collapse was almost a certainty, just four days before it filed for bankruptcy. Now, the public outcry about the corporate scandals has put the inner workings, the power and role of the credit rating agencies under tough regulatory scrutiny.

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