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Cuomo - Settling Probe of Rating Agencies

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Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
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Apparently Moody's, Standard & Poor's -and- Fitch are near an agreement with Cuomo to end an investigation
into the credit-rating companies' role in the subprime-mortgage fiasco
--- Why they gave top grades to subprime-mortgage securities / CDOs.

The agreement may give them incentive to do the right thing:

"The ratings companies would be paid by bond issuers for any preliminary work reviewing the structure of U.S. subprime- mortgage securities..."

"Currently, the companies are paid only if they are selected to give a ranking...."

So, they would be paid even if they aren't selected to give a final rating, reducing their incentive ... to make the number.

(( Why does the OLD scheme sound familiar ?? ))
 
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