Mortgage Bond Ratings Change: "Too little, too late."
Glad to see someone else is paying attention: New York State Attorney General Andrew Cuomo's office has issued subpoenas to S&P, Moody's and Fitch -- specifically asking "how much each knew about flaws in the mortgage products that they rated triple-A."
"Andrew Cuomo, New York state's attorney general, wants credit-ratings firms to go further in their efforts to overhaul how they rate mortgage-related bonds, criticizing voluntary changes under way at the firms as "too little, too late."
Moody's Corp.'s Moody's Investors Service, the Standard & Poor's Ratings Services unit of McGraw-Hill Cos. and Fimalac SA's Fitch Ratings announced this week separate plans to improve analysis of mortgage-related bonds and other structured-finance vehicles.
Mr. Cuomo called the moves "window dressing" that fall short of the systemic change needed to restore investor confidence. S&P and Moody's "are attempting to make piece-meal change that seem more like public relations window dressing than systemic reform," he said in a statement.
Mr. Cuomo is investigating rating firms to ascertain how culpable they are for assigning ratings that were too high for various bonds backed by subprime mortgages. Collateralized debt obligations that heavily invested in mortgage instruments also were highly rated. Many have since been downgraded, causing billions of dollars in write-offs at financial firms."
In his statement, Mr. Cuomo said his office "will continue its active investigation of the mortgage industry and the role played by the ratings agencies in the mortgage meltdown."
In other words, the NYSAG wants someone to either go to jail, or write a big check. >
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Source:
Rating the Rating Overhaul
New York State Official Calls Voluntary Moves 'Window Dressing'
AARON LUCCHETTI
WSJ, February 8, 2008
http://online.wsj.com/article/SB120240353266351113.html
Friday, February 08, 2008 | 04:30 AM | Permalink
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It will more than likely be "writing a check," which is just another form of bribery. Is there any true blue virtue anywhere?
Posted by: Justin | Feb 8, 2008 6:43:57 AM
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