Thursday, Dec 18, 2008
Sub Prime mortgage fiasco (part 2)
Bloomberg: Fed Loans Guided by Raters Grading Subprime Debt AAA
Federal Reserve Chairman Ben S. Bernanke is basing hundreds of billions in emergency lending on credit ratings from companies that gave AAA grades to toxic securities. The Fed has purchased $308.5 billion in commercial paper and lent $631.8 billion under eight credit programs, most of which require appraisals of short-term debt and loan collateral by “major nationally recognized statistical ratings organizations.” That, in effect, means Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. It is foolhardy to rely on the three New York-based companies, said Keith Allman, chief executive officer of Enstruct Corp.
Posted by jack c @ 10:23 PM (342 views) Add Comment
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