Ratings agencies adjusted ratings to suit Wall Street
A Senate panel investigating the causes of the nation's financial crisis on Thursday unveiled evidence that credit-ratings agencies knowingly gave inflated ratings to complex deals backed by shaky U.S. mortgages in exchange for lucrative fees.
The Senate Permanent Subcommittee on Investigations will hold a detailed hearing on Friday, where its chairman, Sen. Carl Levin, D-Mich., will introduce e-mail records in which executives from Standard & Poor's and Moody's Investors Service acknowledge compromising the integrity of ratings to win business from big Wall Street firms.
The evidence ranges from the embarrassing to the incriminating. Most of it looks more like sloppy mixing of discussions of ratings and payments more then outright collusion. But obviously the independent nature of the ratings agency is compromised when those discussions are mixed.
Jay
