William J. Harrington
Bill Harrington is a Senior Fellow at Croatan Institute. His work centers on boosting the sustainability of the world financial system with the dual aims of rationalizing economic decision-making and avoiding bailouts. He focuses on the capitalization and regulation of derivative contracts and structured finance.
Bill has evaluated products in the international financial markets since 1987, most recently as a research journalist at Debtwire ABS and before that as a senior vice president and derivatives analyst at Moody's Investors Service (Moody's). He also structured derivative contracts that referenced currencies and global interest rates at Merrill Lynch and analyzed the trading patterns of these indices as an economist at The WEFA Group.
Since 2011, Bill has worked to rectify the under-capitalization of the types of complex finance that started and fueled the financial crisis. He has submitted technical comments to US and European regulators, to US and UK legislative committees, and to rating agencies such as Fitch Ratings, Moody's, and S&P Global. Bill also provided insights regarding Moody's rating practices to the US state attorneys general who settled with the company in early 2017.
Bill has self-financed this advocacy and conducts it entirely in the public domain. He regularly speaks to the press, and his work has been profiled in the New York Times, the Financial Times, the Guardian, Bloomberg, Business Insider, ProPublica, the Wall Street Journal, the Washington Post, and on the BBC and American Public Media's Marketplace. He places all work on government and other websites and actively engages regulators, market practitioners, journalists, and other parties in on-the-record dialog.
Additionally, Bill serves on the Experts Board of Wikirating.
Bill was born and raised in the historically significant mill city of Lowell, Massachusetts, a cradle of the US Industrial Revolution and home to many of his family. Their deep Lowell roots extend to the 1857 arrival of John and Margaret Harrington from Ireland. Six of Bill's maternal great, great grandparents also immigrated directly to Lowell from Quebec in the 1860's, from Ireland in 1870, and from England in 1871. More recently, Bill's maternal and paternal grandparents lived a few houses apart on the same street between 1944 and 1965. This 160-year history of Lowell life animates Bill's fascination with the interplay of economic cycles and human decision making.
Bill and his partner John live in New York City. Bill is an avid, lefthanded tennis player.
Education M.B.A., Concentration in Finance, The Wharton School of the University of Pennsylvania
B.A., Economics, University of Pennsylvania
"Can Green Bonds Flourish in a Complex-Finance Brownfield?" Croatan Institute, July 2018.
“Efficient, Commonsense Actions to Foster Accurate Credit Ratings.” Capital Markets Law Journal 11, no. 1 (2016): 38-59 doi: 10.1093/cmlj/kmv064). Presented at the 2015 annual meeting of the American Political Science Association in San Francisco (with Norbert J. Gaillard).
“Moody’s Bets Germany Will Support Deutsche Bank Derivatives Above All Else.” Debtwire ABS, 12 October 2016. Available on Debtwire.com.
“Existing ABS Swaps Also Caught in Swap Margin Net.” Debtwire ABS, 12 August 2016. Available on Debtwire.com.
“US Margin Rules for Swaps Obliges Securitization Issuers to Overhaul Structures, Add Resource and Rethink Capital Structures.” Debtwire ABS, 4 November 2015. Available on Debtwire.com.
“Update on the Lehman Brothers Derivative Product Companies’ Bankruptcy (Plan of reorganization by the Lehman bankrupt estate proposes to pay 100% of allowed claims against two Lehman DPCs)". Moody’s Structured Credit Perspectives (June 2010) pp. 29-31.
“Mitigating Voluntary Bankruptcy Risk of U.S.-Domiciled Termination Derivative Product Companies and Assessing the Effectiveness of Continuation Derivative Product Companies.” Moody’s Investors Service Methodology, 16 July 2009 (with Alice Yu and Claudia Green).
“Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions.” Moody’s Investors Service Methodology, 25 May 2006 and in global use until 11 November 2013 (with Edward Manchester and Nicholas Lindstrom).
“Capping Hedge Termination Payments in Moody’s Rated Structured Notes Following Default of the Underlying Debt Instrument.” Moody’s Investors Service Special Report, 17 September 2004 (with Deboleena Dutta).
“Moody’s Approach for Rating Thresholds of Hedge Counterparties in CDO Transactions.” Moody’s Investors Service Guidelines, 23 October 2002.
Submissions to US and EU Regulators and Legislative Committees:
“Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers and Major Security-Based Swap Participants and Capital Requirements for Broker Dealers.” (Federal Register Vol 83, No. 203, Pages 53007-53020). SEC.gov. November 19, 2018. (Submitted to the US Securities and Exchange Commission).
“Capital Requirements for Swap Dealers and Major Swap Participants.” (Federal Register Vol 81, No. 242, Pages 91252-91334). CFTC.gov. 4 May 2017. (Submitted to the Commodities Futures Trading Commission (CFTC) and Office of Management and Budget. Also forwarded to the US Department of Justice and to state attorneys general who were signatories to a settlement with Moody’s Corporation, Moody’s Investors Service, and Moody’s Analytics dated 13 January 2017.)
“Margin and Capital Requirements for Covered Swap Entities; Interim Final Rule to Exempt Commercial End Users and Small Banks.” (Federal Register Vol. 80, No. 229, Pages 74916-74924). federalreserve.gov. 31 January 2016. (Submitted to the Federal Reserve Board of Governors, FDIC, Farm Credit Administration, Federal Housing Finance Agency, and Office of the Comptroller of the Currency — collectively, the “prudential regulators.”)
“CFTC Letter No. 15-21 & Rating Agency Overrides of Published Methodologies for Swap Contracts.” 15 May 2015. (Also submitted to the US Securities and Exchange Commission (SEC) and European Securities and Markets Authority (ESMA.))
“Response to Public Consultation on an EU Framework for Simple, Transparent, and Standardised Securitisation.” 13 May 2015. (Submitted to the European Commission.)
“Orderly Resolution, Systemic Stability, and Sustainable Economic Growth — Why Issuers of Asset-Backed Securities Must Post Full Margin Against All Swap Contracts.” CFTC.gov. 12 May 2015. (Presentation for joint teleconference with the six rule writing teams of the CFTC and the respective prudential regulators.)
“Comment on US Treasury Effort to Revive Private-Label RMBS.” Regulations.gov. 8 August 2014.
“Request for Re-proposal on Rules for Nationally Recognized Statistical Rating Organizations (File Number S7-18-11).” SEC.gov. 29 May 2014.
"Securitization Swaps and the CFTC Clearing Mandate for Interest Rate Swaps." 3 February 2014. See SEC submission immediately below, last nine pages.
"Questions for the SEC Open Meeting of 5 February 2014." SEC.gov. 2 February 2014.
“Comments on SEC Roundtable for Asset-Backed Securities.” SEC.gov. 3 June 2013.
"Questions for Mr. Ray McDaniel, Chairman & CEO of Moody's Investors Service." 3 April 2012 (Shared with UK Commons Treasury Select Committee to aid review of credit rating agencies.)
"Collapse of MF Global: Part 2 – Comments on NRSRO Testimony and Questions for the Open Record." 17 Feb 2012. Also, “WJH Notes 1 & 2 – Moody’s and S&P Summaries on MF Global.” 6 Feb 2012. (Prepared for House Financial Services Sub-Committee for Oversight and Investigations examining MF Global bankruptcy. Also submitted to UK Commons Treasury Select Committee to aid review of credit rating agencies.)
“Comment on Proposed Rules for Nationally Recognized Statistical Rating Organizations (File Number S7-18-11).” SEC.gov. 8 August 2011.
Journalism (Bill Harrington unless noted otherwise)
— Derivative Contracts —
Linacre, James. “Swap downgrades ‘justified, necessary.’” SCI (Structured Credit Investor (structuredcreditinvestor.com) 20 October 2017.
"Fitch Ratings Review of Navient Solvency & Swap Losses on USD 5B of SLABS Residuals." Self-published on LinkedIn.com and submitted to the CFTC, ESMA and SEC. 20 September 2017.
“PWIPC (Persistent Well-Informed Private Citizen) to CFTC: Deny SFIG Request for Margin Exemption for ABS Swaps.” Deny SFIG Request for Margin Exemption for ABS Swaps.” Self-published on Linked-In.com and submitted to the CFTC. 14 July 2017.
“Some Things Can’t Be Tweeted. Like a Fix to Complicated Finance.” Self-published on LinkedIn.com and submitted to the CFTC and SEC. 5 May 2017.
“ABS Margin Posting — 500 Days Late and How Many USD Millions Short?” Self-published on LinkedIn.com and submitted to the CFTC and SEC. 12 February 2017.
SCI. “Watching Waterfalls—Call for increased derivatives disclosures in securitizations.” Structured Credit Investor (structuredcreditinvestor.com) 14 Aug 2014.
Marriage, Madison. “Ex-Moody’s staff raise alarm over ABS.” Financial Times FTFM 10 November 2013.
SCI. “Counterparty Conundrums—Investors, issuers adapting to swap-related dilemmas.” Structured Credit Investor (structuredcreditinvestor.com) 2 August 2013.
SCI. “Ratings Differentiation—Call for improved assessment of derivatives risk.” Structured Credit Investor (structuredcreditinvestor.com) 10 April 2013.
— Credit Rating Agencies —
“Open Letter from Former Rating Agency Executives on the Financial Choice Act.” Self-published on respective LinkedIn.com sites, published on Wikirating.net and submitted to the SEC. 1 May 2017 (with Marc Joffe).
“Financial Choice Act Immunizes Rating Agencies from Accountability.” Self-published on LinkedIn.com. 28 April 2017.
“Moody’s DOJ Settlement Won’t Stop Fake Rating Analysis & Derivative Denial.” Self-Published on LinkedIn.com and submitted to the CFTC, SEC and ESMA. 14 January 2017.
Luyendijk, Joris, (2016). Among the Bankers – A Journey into the Heart of Finance. Brooklyn NY and London: Melville House. (First published in 2015 in the UK by Guardian Books and Faber and Faber Ltd as Swimming with Sharks: My Journey into the World of the Bankers).
Exploring Shadow Banking: Can the Nation Avoid the Next Crisis? Center for American Progress. Presenter and panelist. 12 July 2016. Agenda and video (WJH remarks from 1.24:00 to 1.36:00. Panel discussion from 1.36:00 to 1.56:00) available at: https://www.americanprogress.org/events/2016/07/01/140814/exploring-shadow-banking-can-the-nation-avoid-the-next-crisis/.
What’s changed in the credit ratings business? ‘Marketplace.’ Narrator/Producer Sabri Ben-Achour. American Public Media. 3 February 2015.
Podkul, Cezary. “Years After Tobacco Deals Sold, SEC Says Rating Agencies Still Conflicted.” ProPublica 13 January 2015.
How bankers muscled rating agencies on tobacco bonds. ‘Marketplace.’ Narrator/Producer Stan Alcorn. American Public Media. 23 December 2014.
"Ausgeratet": Rating-Agenturen am Pranger ("Ausgeratet": rating agencies in the pillory). ‘plusminus.’ Narr. Markus Schmidt. Dir. Annemarie Kammerlander. Erstes Deutsches Fernsehen (ARD). Germany, 15 May 2013.
Shenn, Jody. “Fitch Waivers Over Plan to Relax Derivative Rules.” Bloomberg 23 May 2012.
Do credit rating agencies threaten our financial stability? File on 4. Narr. Hugh Pym. Dir, Lucy Proctor. BBC Radio 4. 28 February 2012.
Wer hat Schuld am Eurochaos (The Euro Crisis: Who is to Blame)? Narr. Karl Hinterleitner. Prod. Stephan Mueller. Zweites Deutsches Fernsehen (ZDF). Germany 23 November 2011.
Eisinger, Jesse. “Vows of Change at Moody’s, but Flaws Remain the Same.” New York Times 13 April 2011.