The interview is with McGraw-Hill CEO Terry McGraw. In the interview Mr McGraw starts off talking about new tools for college classrooms but then it gets more exciting and he discusses the recent case in which a judge allowed rating agencies to be sued. McGraw stresses that there was no fraud, but that they did not expect real estate declines to be as sharp as they were. (it is interesting to note, they did allow for 15% declines which if you remember back last year people were saying that rating agencies never considered ANY decline. So that was clearly wrong.
He then tackles the basic structure of the rating agencies where firms pay to be rated and disagrees that it is flawed.
From Clusterstock: McGraw Hill CEO: We Just Got It Wrong:
"..he addresses the pay-to-play model, and he argues that it's the only one that makes sense. When issuer-pays, the ratings are freely disseminable to everyone. When a buyer pays, the information stays with the buyer. And what's more, there's not much of a business selling this kind of research to each customers"