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Released: May 14, 2013
Credit-rating agencies poised to avoid overhaul
Source: Dina ElBoghdady, Washington Post (Free Registration)
Three years after Congress told federal regulators to consider changing the way credit-rating agencies are paid, the industry appears poised to dodge a major overhaul. The ratings firms have been widely criticized for contributing to the 2008 financial crisis by issuing high ratings to toxic securities backed by residential mortgages.
Since then, the way these firms are compensated has come under scrutiny, with critics arguing that the agencies have a conflict of interest because they’re paid for their analysis by the very banks and corporations whose products they’re rating.
Read Full Article: Credit-rating agencies poised to avoid overhaul
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