You thought they were done…


… but legislators had another group to criticize today for our financial crisis: the credit rating agencies.

As Rep. Henry Waxman, D-Calif., put it during a hearing before the House Oversight and Government Reform committee:

The story of the credit rating agencies is a story of colossal failure. The credit rating agencies occupy a special place in our financial markets. Millions of investors rely on them for independent, objective assessments. The rating agencies broke this bond of trust, and federal regulators ignored the warning signs and did nothing to protect the public. The result is that our entire financial system is now at risk.

It’s another example of the utterly fragmented state of the nation’s financial regulators, a topic we’ve been following for a few weeks. Two different agencies regulate banks, and another regulates credit unions, institutions with a similar purpose. Nobody regulates credit default swaps.

And the credit rating agencies? The SEC was supposed to regulate those, but it never happened.

The committee has another hearing planned for tomorrow morning, with former Treasury secretary John Snow and former Fed chairman Alan Greenspan scheduled to testify.


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