> Credit reporting system works pretty well Citation needed. > (where government forced banks to ignore credit ratings) This is simply not true. The mortgage

> Credit reporting system works pretty well Citation needed. > (where government forced banks to ignore credit ratings) This is simply not true. The mortgage bubble burst when big investment and gambling/speculation institutions could no longer cover the shorts against mortgage bond derivatives and the incentive for packaging questionable mortgages into the underlyings disappeared. These mortgages weren't all (or even mostly) to poor people with no ability to pay, and the government didn't force anybody to do anything. These same banks paid ratings agencies to ignore the bad mortgages in these securities specifically so they could increase the volume of mortgage bond sales. So your example is actually one that shows that ratings agencies' products are not necessarily accurate (some might call them fraudulent, even).