An investigation into credit rating agencies in the US has uncovered major weaknesses in ratings practices, as well as conflicts of interest.
The Securities and Exchange Commission (SEC) has been investigating the role of three major credit rating agencies for the past ten months. The SEC investigated Fitch Ratings, Moody’s Investor Services and Standard & Poor’s Ratings Services to evaluate their adherence to their ratings methodologies. Following the sub-prime crisis, US regulators have been particularly interested in how these agencies rate mortgage-backed securities, amid concerns they may not be impartial. The investigation discovered the agencies have struggled to cope with the increase in the number and complexity of re...
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