In a set of remarkable admissions, the rating agencies [eg, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s] acknowledge the degree of problem with ABCP (Asset Based Commercial Paper).
FT.com / Home UK / UK – Ratings agencies critical of guarantees
Ratings agencies have countered that, in many cases, mortgage lenders provided unreliable information and initial ratings assumptions were inaccurate as a result. Many borrowers inflated their income to qualify for loans, while others claimed investment properties were primary residences.
Lets be clear here:
- rating agencies evaluate paper and assess the degree of risk
- the information they were being provided was incorrect, and I would argue criminally so
- yet the agencies, still were happy to announce the paper with a good rating allowing the Banks to trade that paper at preferred rates
Such statements by the ratings agencies, should not be taken lightly. Either the diligence by the rating agency was lacking, or the efforts to cover up by the issuing Banks was so good, that the real information was too difficult to find.
Bankwatch 
See, I still don’t understand how the rating agencies can get away with it.
It is like you buy a TomTom from Dixons and after a week it doesn’t work. You go back to the store and they tell you that you have to deal directly with the supplier.
Didn’t I get my navigator from Dixons? Or didn’t I trust Dixons judgement when selling quality goods?
I wonder why we all focus just on a few links of the lie chain, specially in the case of rating agencies, who spear-headed the subprime boom.
@.Calvin … you are dead right – it should be that simple. Its about credibility, and accountability.