The US financial crisis happened in large part due to the monopoly of the "big three"[1] credit ratings agencies mislabeling bad debt as good. These agencies h

The US financial crisis happened in large part due to the monopoly of the "big three"[1] credit ratings agencies mislabeling bad debt as good. These agencies had a corner on the credit ratings market thanks to the US federal gov't (SEC) bestowing them with the coveted "Nationally Recognized Statistical Rating Organization" (NRSRO)[2] status, a status which only those three companies held between the mid-1990s until early 2003, firmly cementing them in the financial industry as the chosen ones for credit ratings. The US gov't also gave some extra protection to NRSRO-rated debt, e.g. by recognizing it as legal investments.[3] So in this case, over-regulation and the monopoly it bred had quite a large hand in the financial crisis. [1]: http://en.wikipedia.org/wiki/Big_Three_(credit_rating_agencies)#2007-2010_financial_crisis http://en.wikipedia.org/wiki/Big_Three_(credit_rating_agenci... [2]: http://en.wikipedia.org/wiki/Nationally_recognized_statistical_rating_organization http://en.wikipedia.org/wiki/Nationally_recognized_statistic... [3]: http://en.wikipedia.org/wiki/Nationally_recognized_statistical_rating_organization#Subprime_mortgages.2C_CDOs.2C_and_the_financial_crisis http://en.wikipedia.org/wiki/Nationally_recognized_statistic...