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Buffet and the ratings agency answer the call | Financial Crisis Inquiry Commission

Today’s hearings at the Financial Crisis Inquiry commission cover Moody’s and other ratings agencies and their role in bringing down the house in the Crisis. While around the blogs questions have been raised regularly on why these agencies even exist after the better banks croaked, Buffet is expected to answer questions later in a couple of hours on whether the agencies would be criminally liable.

Meanwhile reforms have further strengthened the agencies’ official position with a national ratings agency board getting to qualify agencies for structured bonds issues and them selecting from the qualified quorum for each bond IPO as suggested by Al Franken. Many of us would have instead liked the agencies criminally liable in courts for their mis-actions

Moody’s started off the hearings telling Bill Thomas(VC) in prepared statements that the agencies definitely failed in anticipating the coming crash but the investors should not use ratings for Buy, Hold and Sell decisions. Berkshire Hathaway has lost $340 million in its Moodys investment till right now. Buffet holds 13% in Moodys’

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This entry was posted on June 2, 2010 by in Financial Markets and tagged , , , .

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