Agencies still refuse to say sorry for role in financial crisis
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The world's biggest credit ratings agencies came under heavy fire yesterday when they repeatedly refused to apologise to MPs for the debacle over toxic mortgage-backed securities which triggered the financial crisis.
Senior bosses from Moody's, Fitch, Standard & Poor's and smaller rival DBRS – appearing after the Treasury Select Committee launched an inquiry into ratings agencies – were also accused at an ill-tempered hearing of running a "racket".
Since the credit crunch struck in 2007, ratings agencies have come in for huge criticism over the gold-plated AAA ratings bestowed on thousands of complex, financial products backed by hugely risky sub-prime mortgages, in return for huge fees from investment bankers.
But the European chief of Moody's, Frederic Drevon, and Standard & Poor's managing director, Dominic Crawley, only expressed "regret" and "dissatisfaction" for failures over the sub-prime bonds which infected the global banking system.
Mr Crawley told MPs: "We have repeatedly over a number of years expressed our regret about the assumptions built into our sub-prime models. We, like many others in the market, did not foresee the severity of the downturn in the US."
Mr Drevon admitted to the practice of "ratings shopping" during the build-up to the credit crunch, where bond issuers of bonds would "shop around" the agencies to get the best rating for their products. The Hereford MP Jesse Norman asked Mr Drevon: "You don't share my view that this was a racket?"
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments