Credit rating industry dodges reforms, despite role in financial meltdown / Flaws in bond rating system that led to financial collapse remain

Source: Alison Fitzgerald, Center for Public Integrity, June 18, 2014

Key findings:
– Despite contributing to the 2008 financial crisis by rating bonds made up of toxic mortgages as ‘AAA,’ the big credit rating companies are as powerful as ever.
– State pension funds are suing credit raters, yet they still depend on ratings from the firms to guide investment decisions.
– Most industry reforms haven’t been fully implemented or have failed outright, setting up the markets for another possible fall.
– The Securities and Exchange Commission has promised not to enforce part of the Dodd-Frank law that would make credit raters liable for bad ratings.
– The credit rating system is rife with the same conflicts of interest that caused distorted ratings before the financial crisis.