Well before Bear Stearns vanished on March 17, 2008, Fed chair Bernanke and others were concerned that the bullshit the ratings agencies had been peddling was going to catch up with them.
Bernanke Voiced Alarm Over Credibility of Ratings Firms
By Joshua Zumbrun & Jeff Kearns - Feb 5, 2013 3:54 PM MT
BLOOMBERG
Federal Reserve policy makers including Chairman Ben S. Bernanke voiced alarm in August 2007 over a loss of investor confidence in ratings companies, warning that the declining credibility could worsen market turmoil.
“There is an information fog” that “is very much associated with the loss of confidence in the credit-rating agencies,” Bernanke said at a meeting on Aug. 7, 2007. The firms’ “credibility has been shot” and “it is much harder to see that this market will unwind itself in a rather kind and comforting environment,” said Kevin Warsh, then a Fed Governor.
In June 2007, William C. Dudley, then the head of the markets desk of the Federal Reserve Bank of New York, warned of the risk to broader financial markets from flawed credit ratings.
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2 comments:
Bernanke has of course pressed for criminal prosecution, right?
(Rhetorical.)
At moments like this, Anarchism starts looking like a good option.
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