Article reports: “At more than 2,300 pages, the Dodd-frank Wall Street Reform and Consumer Protection Act was bound to have unintended consequences. It took only a day for the first one to come to light….Facing legal liability for the first time, [rating firms] are now refusing to allow their ratings to be used in offering documents. This created a Catch-22 for companies that were trying to raise money by selling asset-backed debt. The law requires those assets to include ratings in official documents.”
WATCHDOG: In other words, Moody’s Investors Services and Standard & Poor don’t want to have any skin in the game. They simply want to collect fat fees without responsibilities. That is one of the reasons we got into this mess in the first place! The Watchdog suggests they be held responsible for up to two million dollars in liabilities for each report. That will add some discipline to the system.
