In yet another embarrassment for rating agencies in the wake of “AAA subprime loans” and other missed economic cues, critics charge that Moody’s should have been tougher a lot earlier on their downgrade of Greece.

According to The New York Times, “Until two years ago, the ratings agency took a relatively lax approach to growing signs of troubles in Greece, epicenter of the current crisis, even as the country plowed ahead with a borrowing binge that jeopardized its fiscal condition.”

The Times reports Moody’s held off dropping its strong A rating of Greece’s bonds despite growing political turmoil and economic woes through 2009.

“Investor fears over Greece’s short-term financing needs were ‘misplaced,’ Moody’s said in a report in early December 2009,” according to the paper. “Twenty days later, after a review, the agency downgraded the nation’s debt, the last of the major ratings agencies to do so.”

After that, the ratings of the debt-ridden country went into a virtual free fall, critics note, and within six months Moody’s assessed its debt as much riskier for investors, giving it junk status.

“If you look at the fact that this is going to be a country that is going to default on its debt, and two years before it was still single A, that is a very, very precipitous fall,” Pierre Cailleteau, Moody’s former head of sovereign debt ratings conceded to the paper. He rated Moody’s performance as mediocre, but added that it could have been worse.

“Moody’s lapses before last year helped embolden Greece to heap on billions in sovereign debt and encouraged investors to invest more heavily in its debt,” the Times reports. “Now some of those buyers face 50 percent losses on the bonds—loans that carried the agencies’ stamp of approval but that Greece can no longer afford to pay off. Had the rating agencies been more skeptical of euro zone countries’ borrowing beyond their means, critics say, which might have slowed the debt carousel for Greece and others.”

 “The credit rating agencies failed in their job,” said Wolf Klinz, a European Parliament member from Germany and author of a critical 2010 report on ratings agencies, told the Times. “They held on artificially too long to their original rating. They should have started earlier.”