The Financial Crisis Inquiry Commission (FCIC) is the bipartisan commission appointed by Congress to investigate the causes of the financial crisis. It is holding the fifth in a series of hearings on Wednesday, June 2, at the New School in New York, focusing on the role of the credit ratings agencies.
Kate McBride, editor of WealthManagerWeb.com, is attending the meeting, and filing live Twitter updates during the day, in addition to filing news reports during and after the one-day hearing that features in the afternoon a scheduled appearance by Warren Buffett.
In his prepared opening statement, FCIC Chairman Phillip Angelides began by saying that “credit rating agencies have played a pivotal role in our financial markets,” and in examining Moody’s as a case study in the hearing, “we will have questions about why
things went so very wrong.” Saying “the picture is not pretty,” Angelides pointed out that “Moody’s revenues from rating complex financial instruments like mortgage securities grew by a whopping 523%” from 1998 to 2007, while “from 2000 to its peak in 2007, the company’s stock price climbed more than six fold. Moody’s did very well. The investors who relied on Moody’s ratings did not fare so well.”
Visit the FCIC’s Web site to read more about its charter and testimony presented at previous hearings.