State Treasurer Bill Lockyer gave one thumb up to Moody's Investors Service for allowing California and other municipal bond issuers to be rated -- if they ask -- on the same scale as corporate bonds. Lockyer has complained that munis wind up with lower ratings than the AAA he says most should get, ostensibly to let buyers distinguish among them, but with the actual effect of compelling states, cities, school districts -- and taxpayers -- to pay too much in insurance costs or interest.

On Wednesday, Lockyer gave Moody's a shout-out but said the move to assign optional global scale ratings -- in effect rating munis on the same scale as corporate bonds -- alongside traditional ratings does not go far enough.

As I've stated, the goal must be a rating system that provides clarity and consistency. An interim period in which GSRs are assigned alongside municipal scale ratings will create confusion, not clarity. Such confusion will be even greater if some bonds carry GSRs and others do not. Therefore, I urge Moody's to assign a GSR to all municipal bonds, and not simply at the request of the issuer.

Fitch Ratings also has agreed to re-examine the different rating scales for corporate bonds and munis.

The Times editorialized last month that Lockyer was on the right track with his call for rethinking the way state and local government bonds are rated. Not everyone agrees with us, or with Moody's and Fitch. See this week's Blowback by Steve Zimmermann of Standard & Poor's.