Le Québec, floué de plus 10 milliards par Toronto !
28 janvier 2011
What didn’t cause the U.S. financial crisis
(...) the ground zero of fraud occurred not at the retail mortgage level, but at the rating agencies. Moody’s, Standard & Poor’s and Fitch were assigned monopoly powers by federal regulations. Their ratings determined which bonds could be bought by fiduciary institutions. They engaged in behavior that it’s very hard to distinguish from auctioning off their ratings to eager bidders. Of all the things about the crisis I do not understand, the thing I understand least is why nobody from those agencies has faced any kind of legal sanction.
From page xxv:
From 2000 to 2007, Moody’s rated nearly 45,000 mortgage-related securities as triple-A. This compares with six private-sector companies in the United States that carried this coveted rating in early 2010. In 2006 alone, Moody’s put its triple-A stamp of approval on 30 mortgage-related securities every working day. The results were disastrous: 83% of the mortgage securities rated triple-A that year ultimately were downgraded.
You will also read about the forces at work behind the breakdowns at Moody’s, including the flawed computer models, the pressure from financial firms that paid for the ratings, the relentless drive for market share, the lack of resources to do the job despite record profits, and the absence of meaningful public oversight. And you will see that without the active participation of the rating agencies, the market for mortgage-related securities could not have been what it became.
Read more: http://fullcomment.nationalpost.com/2011/01/28/david-frum-what-didnt-cause-the-u-s-financial-crisis/#ixzz1CLctUnDa
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JCPomerleau
