Salient to Investors:
John Griffin, Jordan Nickerson and Dragon Tang at the University of Texas said Standard & Poor’s and Moody’s inflated their grades on securitized debt prior to the financial crisis to match each other’s opinions to avoid losing business. CDOs rated AAA by both companies defaulted more often than securities with the same grade from one firm.
Read the full article at http://www.bloomberg.com/news/2013-01-30/rating-firms-inflated-credit-grades-to-match-rivals-report-says.html
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