The field of credit ratings agencies is about to get a bit bigger.
Meredith Whitney, the analyst who predicted troubles at Citigroup in 2007 and then started her own research company, is launching a ratings agency .
If she hopes to compete with incumbent raters, she'll need an army of analysts. Moody's, for example, employs 4,300.
Whitney told the Financial Times that she would use the same increasingly controversial business model as current raters, in which debt issuers pay for a score. Whitney said the goal is to be seen as a competitor to these agencies, and that the only way to achieve that is to use the same model.
Critics contend that the arrangement gave ratings agencies an incentive to go easy on issuers, particularly companies selling packages of toxic mortgages. Whitney may be hoping that her notoriously bearish record will preempt such criticism.
Her research group did not respond for comment at press-time.
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