Moments before the Senate overwhelmingly passed a bill to overhaul the credit ratings industry seven years ago, Republican and Democratic sponsors took turns touting its promise for ending an entrenched oligopoly.
The bill, they said, should break the vicelike dominance of three agencies – Standard & Poor’s Ratings Services, Moody’s Investors Service and the smaller Fitch Ratings – in an industry that serves as a crucial watchdog over the nation’s financial system.
What’s escaped public scrutiny until now, however, is that the law’s tough criteria defining when a newcomer could join the industry weren’t written by Congress. They were crafted by a yet-to-be-identified official of one of the big three ratings agencies, a former aide to the Senate Banking Committee has told McClatchy.
Experts and the heads of unregistered ratings firms worry that congressional staffers, in seeking help to ensure that fly-by-night companies couldn’t win federal approval, inadvertently let the fox into the coop.
TVNL Comment: So, what else is new? ALEC writes domestic laws for Congress and state legislatures, AIPAC determins Middle East policies, energy companies control government regulatory laws....on and on and on. Why is it surprising that rating companies draw up bills that determine their control of the financial system of the US? Wake up, America.
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