TOP credit ratings agency executives faced a wave of criticism from MPs yesterday for the mistakes made by their institutions before the financial crisis.
The industry was either incompetent or its judgment affected by a conflict of interest, Tory MP David Ruffley told directors from Moody’s, Fitch, Standard & Poor’s, as well as smaller Canadian agency DBRS, at the Treasury Select Committee.
Andrew Tyrie, Tory chairman of the TSC, said MPs were “unconvinced” the ratings agencies’ problems had been tackled and pressed directors to make a full apology to the millions of people affected because of “the enormity of the blunders” over poor quality assets.
Tory MP Jesse Norman claimed the ratings process had been compromised, saying: “There was an enormous profit stream... from taking goodness knows what quality assets, bundling them together into structured products and then asking you guys to bless them.”
Agencies say the scale of the crisis couldn’t have been predicted and expressed “regret”. Dominic Crawley, director at S&P, said: “We like many others... did not forsee the severity of the downturn” in asset values and in the US economy. Fitch director Paul Taylor said he “absolutely apologises” over the structured products ratings.