Jake On The Rating Agencies
By Francine • Feb 20th, 2008 • Category: Pure ContentAnother great review from Jake Zamansky on the role of the ratings agencies in the subprime crisis.
Investors: Beware any time a market player has a government protected, exclusive franchise to print money.
My take on this from the perspective of the Big 4 later coming later today.
Ordinarily we would just let market forces deal with such failure. However firms like Moody’s, Standard & Poors, and Fitch are granted special competitive advantages because they are part of a select group of eight companies designated as Nationally Recognized Statistical Rating Organization (or “NRSRO”). Based on their record, the government should not be protecting them.
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Francine McKenna (@retheauditors) has more than twenty years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad. For more info, click the "About" page link at the bottom of this page.
Francine:
You sound just like me, “Beware ….” Consider what that implies for Helicopter Ben and the Feds.
[...] today, I pointed you to an article by Jake Zamansky on the role of the ratings agencies in the subprime crisis. I would also point you to Jim [...]