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WSJ: Why Credit Raters Keep Their Power [Depsite Being Totally Useless and Probablt Complicit]

Financial-Overhaul Law Was Supposed to Reduce Their Influence; Idea Looked Good on Paper


Curbing the influence of credit-rating firms, a goal of this year's financial overhaul, is so far proving easier said than done, reflecting the industry's deeply embedded role in the financial system.

One example: Though many U.S. banks suffered losses on mortgage-related deals blessed by ratings firms before the crisis erupted, some financial institutions have been lobbying against a provision in the Dodd-Frank financial-regulation law passed in July that bans the use of ratings in federal agencies' rules.

Regulators now use ratings to assess the risk of assets, such as mortgage-backed securities, in determining how much capital banks must hold against potential losses.

Banks contend that alternative approaches, including coming up with their own risk assessments, could have unintended consequences.


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Where is that video....

of the guy in the EU government bad mouthing the credit rating agencies.....

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