Thursday, 27 September 2007

Quote of the day

From Bloomberg:

``Moody's does not structure, create, design or market securitization products,'' Kanef [group managing director, asset finance group, Moody's Financial Services] said. ``We do not have the expertise to recommend one proposed structure over another, and we do not do so.''

Update. After that confidence building statement, we have the FT reporting that a senior U.S. official is considering splitting up the advisory and ratings functions of the agencies to reduce their conflicts of interest. It will be interesting to see if there is a knock-on effect to Basel 2 here: after all, ratings are at the heart of the new Accord, and now it is clear how untrustworthy they were in some cases, the supervisors might have a change of heart.

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