Posted on 02 Jun 2010
The chief executive of the Moody's Corporation said Wednesday his company's inaccurate ratings of mortgage-related investments were "deeply disappointing."
The executive, Raymond McDaniel, said Moody's is not satisfied with the ratings' performance and is working to improve its process.
He made the remarks in prepared testimony to be delivered to the Financial Crisis Inquiry Commission Wednesday alongside Warren Buffett, whose investment firm is Moody's largest shareholder.
Rating agencies have been criticized for giving high ratings to complex investments backed by risky mortgages. When homeowners defaulted, the agencies downgraded billions of dollars of investments, helping to spark the financial crisis.
At Wednesday’s hearing, the panel will investigate how the agencies decide on their ratings, how those ratings contributed to the financial crisis and whether the agencies' business model is partly to blame.