THIS ISN'T AT ALL SURPRISING

(h/t Dan Crawford at Angry Bear)
Given what we already know about the dishonesty of the credit rating agencies, it was only a matter of time before someone cranked out some statistical evidence. Mark Thoma links to a new study that should help the DOJ in its suit against these enablers of the banksters:

Corrupted credit ratings: Standard & Poor’s lawsuit and the evidence

Matthias Efing, Harald Hau, 18 June 2013
Statistical evidence on rating bias in structured products

While the US Department of Justice did not give any statistical evidence in its deposition, our new research (Efing and Hau 2013) suggests that rating favours were indeed systematic and pervasive in the industry.

In a sample of more than 6,500 structured debt ratings produced by Standard & Poor’s, Moody's and Fitch, we show that ratings are biased in favour of issuer clients that provide the agencies with more rating business. This result points to a powerful conflict of interest, which goes beyond the occasional disagreement among employees.

The beneficiaries of this rating bias are generally the large financial institutions that issue most structured debt; they in turn provide the rating agencies with most of their fee income. Better ratings on different components (so-called tranches) of the debt-issue amount to a lower average yield at issuance – a cost reduction pocketed by the issuer bank.

UPDATE: The indispensable Matt Taibbi has more on these fraudsters:

But what about the ratings agencies? Isn't it true that almost none of the fraud that's swallowed Wall Street in the past decade could have taken place without companies like Moody's and Standard & Poor's rubber-stamping it? Aren't they guilty, too?
Man, are they ever. And a lot more than even the least generous of us suspected.