WASHINGTON/NEW YORK (Reuters) – The Big Three U.S. credit rating agencies looked set to survive Washington’s push for financial reform with only minor damage, until Democratic Senator Al Franken came along.
In a series of speeches this week, Franken — a former comic actor and writer for the popular TV show Saturday Night Live — has won bipartisan support for a proposal to reshape the credit rating agency industry.
Now essentially a three-way oligopoly of Moody’s Corp, Standard & Poor’s and Fitch Ratings, the industry is widely blamed for misjudging the risks of debt instruments at the core of the 2008-2009 financial crisis.
Investors and analysts have fiercely criticized the missteps of the big three rating agencies as one catalyst of the global financial crisis. The top-AAA ratings that agencies assigned to pools of mortgage securities grossly overestimated their credit quality, analysts say.
To read the full article, click here …
