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In fact I believe the rating agencies that mis-rated the risk of these CDOs had full access to all this information anyways.
by Certhas 9y ago
In fact I believe the rating agencies that mis-rated the risk of these CDOs had full access to all this information anyways.
- trevelyan 9y agoYou're right that it was possible for people to consult the original (think, paper-based prospecti) in at least some cases, but most people relied on the ratings agencies and they claim to have essentially greenlit their ratings on what the Black–Scholes equation told them, using assumptions that were convenient but untrue (i.e. Gaussian cupola -- that defaults would not be correlated).