What happened to Moody's is what happens to every "agent" who thinks he can serve two masters. The sad thing is that it keeps happening, even though we've seen this movie before.
Credit rating agencies are supposed to monitor debt that's issued by financial institutions and governments. It's their job to protect investors from purchasing financial instruments that are misleadingly packaged or are riskier than the buyer can afford. These "agencies" hold extraordinary power - to destroy companies, to make people fabulously rich, even to influence governments.
The problem is they're not "agencies" at all. They're for-profit companies who have their palms outstretched to the big banks for revenue even as they're "policing" the soundness of their portfolios. more »
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