According to a BBC article today, “The US senate has voted to tighten up regulation of credit rating agencies as part of measures to prevent another financial crisis.” Pointing out that although banks acted recklessly, by selling high-risk products with low-risk ratings, the rating system is partially to blame for the financial crisis in the US, because it was the rating system which allowed the banks to do so.
Rating Agencies:
- Moody’s
- Standard & Poor’s
- Fitch
In order to prevent bank crises, in the future, the US senate is debating legislation that will tighten financial regulation. “The plans for tigher regulation come amid reports that several major Wall Street banks are being investigated by New York’s attorney general over whether they misled rating agencies over mortgage-related deals in the run-up to the crisis,” Rating agencies face new US regulation, BBC News.
