Regardless of the reason, the change to the “issuer pays” business model opened the door to potential conflfl icts of interest: A rating agency might shade its rating upward so as to keep the issuer happy and forestall the issuer’s taking its rating business to a different rating However, the rating agencies’ concerns about their long-run reputations apparently kept the actual conflfl icts in check for the fifi rst three decades of experience with the new business model (Smith and Walter, 2002; Caouette, Altman, Narayanan, and Nimmo, 2008, chap. 6). There were two important and related characteristics of the bond issuing market that helped: First, there were.
