With the passing of the reform bill, Standard & Poor's promptly resolved its CreditWatch on Moody's Investors Service, initiated at the end of June, and lowered its short term credit rating to 'A-2' from 'A-1'. S&P believes Moody's business risk, as a credit rating agency, has increased. It will face increased litigation and changes in operating practices will increase costs and reduce profitability.S&P noted the new legislation allows investors to sue rating agencies if they can show that the agency knowingly or recklessly failed to conduct a reasonable investigation of the factual elements relied upon by a credit rating agency's rating methodology, or obtain a reasonable verification of those factual elements from independent third-party sources.Moody's in turn, placed the 'A2/P-1' long and short term ratings that it assigns to S&P's parent company, The McGraw-Hill Companies Inc., on review for possible downgrade. Moody's said the review was prompted by the heightened uncertainties and potential negative long-term effects on McGraw-Hill from the Reform Bill and increased global scrutiny of credit rating agencies.Moody's also expects that S&P will face increase litigation and that changes to operating procedures will increase costs and reduce profitability.