– 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.