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It's not that they will go out of business, but the way they conduct business and their market share will be very different.Profits will go way down with new regulationNew competition will cut into market share.Most of the banks/financial institutions are still around, it's just that many are trading at 10 or 20 cents on the dollar.Banks took the hit, lenders took the hit, insurance companies took the hitThe Ratings Agencies had somehow avoided the carnage -- that THEY caused.They are just coming back into parity with other financial institutions.Not saying anyone ought to go short here -- just saying the business model has changed
They could go out of business if Calpers wins their lawsuit. Calpers has billions in damages that they claim resulted from negligent ratings. A multi-billion dollar judgment would likely bankrupt Moody's.
Or Calpers could possibly take control of MCO as their single largest creditor in a bankruptcy filing.Yikes!