FSA points credit crisis finger at ratings agency dependency

Hector Sants, chief executive of the regulator, met with the Treasury Select Committee yesterday alongside FSA chairman Callum McCarthy and Loretta Minghella, chief executive of the Financial Services Compensation Scheme. Sants says complex credit derivatives had enough transparency for institutions with the time and resources to understand them and put the onus for the credit crisis on banks that depended on ratings agencies instead. He says such dependency “proved to be unwarranted, inappropriate and not wise in the circumstances.” He acknowledges the derivatives’ complexity but say...