Moody's is scrambling. Negative feedback and the threat of NAIC regulators taking away their acceptable ratings organizations" list has them back-peddling>
Now they will appear at the hearings. The only thing these companies react to are threats. They are not self-policing.
Ratings agencies acted irresponsibly and ought to be held accountable. This situation requires extreme changes to regulatory policy as these companies will exploit every opportunity they get. They love risk that they can pass along to others.
Of coarse they back track...besides congress, now a 3 trillion dollar buyer of rated securities may soon say moodys is now irrelevant. If congress says they are irrelevant and the insurers follow suit...then who is left, and of those left who will actually follow them? their ratings have been "vomit" that have cost extremely risk adverse individuals/companies that rely on the raters ratings as a standard, but instead have resulted in incredible losses--AAA paper has to be held to the standard of US treasuries! They get paid short of nuclear holocaust. Buyers of AAA paper DO NOT buy BB paper, many times they are not allowed; but this is exactly what they peddled, BBB CCC defaulted junk as AAA...opinion? IMO if they could not see it they are incompetent and have no right to be a preferred rater or even in business; if they did know the paper was less then AAA then it is fraud