Thursday, May 13, 2010

Prosecutors Ask if 8 Banks Duped Rating Agencies

http://www.nytimes.com/2010/05/13/business/13street.html?hp

---------- Forwarded message ----------
From: barry levine 
Date: Thu, May 13, 2010 at 12:20 PM
Subject: re: Prosecutors Ask if 8 Banks Duped Rating Agencies
To: letters@nytimes.com


To the Editor:
    After eight years of non-enforcement, it is refreshing to see prosecutors asking if many financial instruments got their exalted ratings because banks duped the ratings agencies.  To phrase the question this way however precludes another question. Did the banks and the ratings agencies collude to sell instruments that didn't deserve their ratings?  The ratings agencies shared their quantitative computer models with the banks and the banks dutifully gave back the numbers that everyone knew would make a triple-A pop out the other end. The banks paid the ratings agencies for their role. It will be for a court to determine if this is collusion, but we must give the case a chance.
Barry Levine

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