another conflict of interest?
During the stock Market and mortgage debacle there was a lot of focus on the Major rating services which include Moody’s Investor’s service, Standard & Poor’s and Fitch Rating. While not the sole cause of the problem it played a significant part, The rating Services Failed to alert investors that complex securities backed by U.S mortgages were of Poor quality even though the received top investment ratings. In a nutshell securities that were “C” rating in reality were given double A or even trip A ratings. This was done because the rating services did not want to lose business to a competitor. If moody’s gave realistic ratings and Fitch gave higher ones it makes sense that the financial service would use the higher rating services. One of the issues is that the rating services are paid by the financial services as a real potential conflict of interest.
They did have compliance officers. But they were all quickly marginalized to be effective a compliance officer whose responsibility is to ensure that financial decisions follow the guidelines ought to report to a senior Member of he management team the CEO, COO, or CFO. In most places they reported at the middle management level with little or no access to decision makers Another technique to ensure they are powerless is to have decisions made and implemented and then have the compliance officer learn about them.. Since all the big deal that was made about the rating being wrong I have heard nothing in the newspapers about anyone taking action to ensure this won’t happen again. .Doing a little research I found that the House Financial Services subcommittee on Capital markets and an initial plan to minimize the conflict of interest that stem from the bond-rating agencies' practice of advising on the makeup of these securities and then receiving handsome payments for rating them, but tabled it.Moody’s own stock Price its high of $70 has dropped $50.
if you want a source red mclatchy "truth to power magazine"
They did have compliance officers. But they were all quickly marginalized to be effective a compliance officer whose responsibility is to ensure that financial decisions follow the guidelines ought to report to a senior Member of he management team the CEO, COO, or CFO. In most places they reported at the middle management level with little or no access to decision makers Another technique to ensure they are powerless is to have decisions made and implemented and then have the compliance officer learn about them.. Since all the big deal that was made about the rating being wrong I have heard nothing in the newspapers about anyone taking action to ensure this won’t happen again. .Doing a little research I found that the House Financial Services subcommittee on Capital markets and an initial plan to minimize the conflict of interest that stem from the bond-rating agencies' practice of advising on the makeup of these securities and then receiving handsome payments for rating them, but tabled it.Moody’s own stock Price its high of $70 has dropped $50.
if you want a source red mclatchy "truth to power magazine"
