Ratings agencies defend their actions
A top executive from Moody's says investors were warned in 2006 about the increased risk in certain kinds of credit transactions.
In late September, the credit ratings agencies were dragged before United States congressional hearings to answer questions about what role they played in the subprime mess unfolding in America.
The gist of the hearings was questioning whether agencies such as MoodyÆs, Standard PoorÆs and Fitch perhaps improperly inflated their ratings of mortgage-backed securities because of possible conflicts of interest. After all, the argument goes, the agencies simultaneously rated various mortgage-backed securities while offering advice to investment firms about how to...
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