Ratings agencies did a lot to bring on this recession by giving dysfunctional outfits a clean bill of health. Now they're being held to account, not before time. Standard & Poor's, Moody's Investors Service and Fitch Ratings are being sued for negligence fraud and deceit and as Frank Partnoy, a professor at the San Diego School of Law and a former derivatives trader told Bloomberg, we need to work out a way of weaning investors and regulators off them.

Maybe some of the answer are coming from Europe with the European Union bringing in rules to promote transparency and ensure these agencies are free from conflicts of interest. Under these new rules, the agencies will not be allowed to provide advisory services, they will be banned from rating financial instruments if they don't have quality information to base their ratings on, they will have to explain their models, methodologies and key assumptions on which they base their ratings, they will have to publish an annual transparency report, they will be forced to review the quality of their ratings and they will have at least two independent directors on their boards whose remuneration doesn't depend on the business performance of the rating agency. These directors will be appointed for only a single term of office, and they can be dismissed in case of professional misconduct.

This is not before time but it does leave one wondering why it's taken so long. The Securities and Exchange Commission is cracking down on conflicts of interest at the rating agencies but the head of the Federal Housing Finance Agency James Lockhart has told Reuters more needs to be done.

All these changes won't amount to much unless markets can be made less dependent on agencies. That would be the best way to bring them to account.