September 2, 2009

Richmond Fed Publication Examines Credit Rating Agencies

Richmond, Va.

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Amid the credit market turmoil, many have criticized the bond rating agencies that awarded top-notch grades to securities which are now called "toxic." But is such criticism warranted? The cover story of this issue of Region Focus considers what role questionable ratings played in fueling the crisis and examines proposals to reform the incentives facing the rating agencies.

Also in this issue:

• Silver Screen Subsidies. State legislators often try to lure movie and television productions to their states. But the effectiveness of these policies as an economic development tool is in question.
• The Economics of Honeybees. Some beekeepers in the Fifth District sell pollination services to farmers as far away as California's almond fields. This market has expanded as wild bee populations have declined and honeybee hives have suffered from a variety of pests and problems.
• The Airline Industry. Strong competition and shifts in market realities -- like oil price shocks and the recession -- are changing how airlines operate and will have real implications for future air travel.

Region Focus, a quarterly business magazine published by the Federal Reserve Bank of Richmond, covers the economy and business activities of the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

For free copies of Region Focus, contact the Bank's Research Publications division at 800.322.0565. The articles are available online at the Bank's Web site. 

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.

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