Credit rating agencies: credibility and accountability

There are many headlines that pass by us on a daily basis, which we read but we do not sit up and take notice. Here are two examples. In January this year, one headline read: “Moody’s reaches $864 million subprime ratings settlement.” The article said: “Moody’s Corp. agreed to pay almost $864 million to resolve a multi-year US investigation into credit ratings on subprime mortgage securities” and that “investigators in the Congress found after the crash that in some cases, credit rating firms were giving out top grades to junk deals simply to win business from the banks preparing the securities.” 

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