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It's pretty obvious the role they played. They're expected to be the arbiters of what the risk is. They were setting the risk value for things they had no clue
by smokinn 17y ago
It's pretty obvious the role they played. They're expected to be the arbiters of what the risk is. They were setting the risk value for things they had no clue about. It was simply incompetent negligence and no one should be trusting them anymore.
- OmniLarry 17y agoI think you're being too kind to them: http://www.independent.co.uk/news/business/news/congress-mauls-bosses-of-credit-ratings-agencies-969792.html http://www.independent.co.uk/news/business/news/congress-mau...
- jsm386 17y agoIt's a lot worse than 'setting the risk value of things they had no clue about.' It was, flat out, a conflict of interest: The AAA ratings given by the agencies proved to be wildly inaccurate and unreasonably high, according to the suit, which also said that the methods used by the rating agencies to assess these packages of securities were seriously flawed in conception and incompetently applied The ratings agencies no longer played a passive role but would help the arrangers structure their deals so that they could rate them as highly as possible, according to the Calpers suit. More @ http://www.ritholtz.com/blog/2009/07/calpers-rating-agencies-to-blame-for-huge-losses/ http://www.ritholtz.com/blog/2009/07/calpers-rating-agencies... (this is just but one example of Barry Ritholtz extensive coverage of this issue. McGraw Hill dropped his book b/c of his payola (acurrate) line about S&P's efforts at this in particular.