It's a good solution for the present situation and one that I support, but preventing self-interest from becoming a part of risk and credibility analysis is, according to the compelling work of Stiglitz and Arrow, always going to be a whack-a-mole game. It's not possible to get to Krugman's "idiot proof" lending environment for more than a short time because power (compelling individuals to surrender their own interests to those of the group) and self-interest are fundamental variables in any lending process.

For example, how well has the SEC actually performed its less critical job responsibilities up to now?  So why would we expect it to do much better job with greater power and responsibility over rating agencies?