Holding The Wrong-doers to Account

On a day when piffle seems to be widespread, Bloomberg reminds us that there may well be a case to answer in some quarters:

Frank Raiter says his former employer, Standard & Poor's, placed a ``For Sale'' sign on its reputation on March 20, 2001. That day, a member of an S&P executive committee ordered him, the company's top mortgage official, to grade a real estate investment he'd never reviewed.

Understandably, reform of the ratings agencies has taken a back seat to the Paulson bailout. But it does need to be done. Furthermore we do need to look back in anger at the doings of the Greenspan boom and, where there is good evidence of malfeasance, hold the perpetrators accountable. If Raiter is correct in his account, the case against S&P appears to be strong.

Update. The second part of the Bloomberg series is also interesting (if marred by the most annoying pop-up I have come across in a while). A highlight:

An S&P executive urged colleagues to adjust rating requirements for securities backed by commercial properties because of the ``threat of losing deals.''

A modern day version of the Pecora Commission is clearly required.