2003 Hall of Fame

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Acceptance Speech of Leo O'Neill

Thank you, Dick for that terrific introduction.

Well, first and foremost I want to express my appreciation to the Fixed Income Analysts Society for this wonderful honor. To be included among the outstanding individuals that have been honored previously by you is quite incredible and totally unexpected. When Diane told me about it, I was somewhat stunned since I really have not been a practicing analyst for many years. (By the way, some people would say that I never really progressed beyond “practicing” even then.) But I think I know why I am being honored here tonight and it probably has less to do with me than it has to do with the organization that I have been so fortunate to be connected with - Standard & Poor’s. I’ll come back to that in a minute if I may. I would also like to recognize my co-honoree this evening, Jack Malvey of Lehman Bros. You will hear shortly of Jack’s outstanding contributions over the years, but suffice to say, he represents the “best in class” of the fixed income analyst community. Congratulations Jack. I also need to thank my colleagues at McGraw-Hill, our parent company, who have been unfailing in their support for our rating activities over the years. McGraw-Hill has been and continues to be the perfect environment for both editorial and analytical objectivity and integrity.

And of course my family, represented here by my wife Kip, and my son, Matt.

But most importantly, I want to thank my colleagues at Standard & Poor’s over the years. They really deserve this award. Too many to name - literally thousands if you think about it - but there are a few here I should mention, even at the risk of overlooking someone. Thank you, Cliff Griep, Ed Emmer, Vickie Tillman, Rik Kranenburg, Vlad Stadnyk, Joanne Rose, Rita Bolger and so many others. Parry Young, Mark Bachmann, Bill Cox, Petrina Dawson, and on and on. All of you. Thank you.

resentations such as these by definition focus on the past but I think perhaps this one is different. If I am correct that this is more about S&P than it is about Leo O’Neill, then this honor that I represent tonight is more a commitment to the future than a recognition of the past. It is an ongoing honor that must be earned every day by Standard & Poor’s in our markets. That’s the way I look at it. Leo goes but S&P remains. The Fixed Income Analysts Society and its members, which represent a critical component of the breadth and liquidity of our markets, with this recognition have a right to expect -- and S&P has an obligation to deliver -- rating judgments with a total commitment to accuracy and timeliness supported by the highest degree of integrity, objectivity, and transparency. Tonight, I think you are saying we are recognizing Standard & Poor’s for this, but I am also hearing - and I hope our people are hearing – S&P, you cannot afford to compromise in any way your commitment to those objectives. I can assure you in the strongest terms that we will not.

But I think there are some things you should not expect and I think for the knowledgeable practitioners in this room you do not. You should not expect ratings to always fit with the market consensus - whatever that is - or not be controversial from time to time. Surely, it is unsettling, it is uncomfortable, but unfortunately that is often a by-product of what we do. You should not expect all rating agencies to agree - heaven forbid, these are opinions after all arrived at by humans - more or less - these days. And you should not, as I am sure all of you would agree, expect ratings to perform any other service than to identify and elaborate on risk. They are not marketing tools or political pronouncements, although they are often used by others this way - at least as long as things are going well. And finally, you should not expect rating agencies to do what regulators, legal counsel, auditors, and other insiders are expected to do and sadly have not done so notably in the recent past. But, enough, I preach to the choir – a quite knowledgeable choir, I might add.

A final observation. I find it ironic but noteworthy that the year FIASI was launched - in Harry’s I believe – 1975 - was the same year that the SEC bestowed its so-called recognition on rating agencies. Now if one were to look at the so-called rating agency industry today, with no other knowledge, one would conclude that given the growth and impact of rating agencies, the original handful of FIASI members would still be at Harry’s bar - if it was still open. But no. FIASI has also grown in size, prestige, and impact both here and outside the United States. One might ask, how can this be? What has happened is that our debt markets have grown in depth, liquidity, complexity, and sophistication driven in large part by a research community where rating agencies play a vital role, certainly, but where diversity of objective opinions, and independent analytical approaches are the ultimate drivers of market health and growth. Rating agencies and the fixed income community have this unusual relationship where you are our audience, our fellow players, but also our critics. You may or may not agree with what we do. And that’s allright. It’s the way free markets should work and do work most of the time in this country. So it is critical that if the rating agency industry is to remain responsive and credible, our ratings must continue to be tested everyday in the marketplace by a knowledgeable and questioning research community as represented by the Fixed Income Analysts Society. So when your audience, your fellow players, and your critics recognize your achievements, it is a tremendous honor. We will work hard to continue to deserve it.

Thank you.

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