In the hunt for culprits of the credit crunch the lack of information, perhaps imperfect information, and the rating agencies have been unfairly singled out as prime suspects. What received scant attention is the fact that in the value chain of capital markets there are many players, some of which acted irresponsibly, misrepresented information, many of them got paid up front, and a poor regulatory regime did not require due diligence on underlying assets. The FED (or tax payer) is now picking up the pieces. BIIA covered the SEC report on the role of rating agencies in the July/August 2008 newsletter. With the plan to relieve banks of illiquid ‘toxic’ debt instruments, the entire matter has now come full circle to point of origin: The US Federal Reserve Bank, which under its former Chairman Greenspan, kept global finance awash with money for too long. Whether the plan will eventually get congressional approval or will work at all has yet to be determined. To read the full story go to: https://2018.biia.com/library.php#208
About The Author
Joachim C Bartels is a co-founder, managing director and Editor-in-Chief of BIIA. In his capacity as Editor-in-Chief he is responsible for the selection of relevant information content concerning industry insights, trends, technological developments, standards and policies impacting BIIA members in particular and the business information industry in general.
The BIIA library is approaching 10,000 news items and best demonstrated practices. BIIA members receive regular news alerts on key developments in the industry and the regulatory environment. The BIIA readership is widespread: between 4 to 5 thousand unique visitors access BIIA.com per month.