A bipartisan study on the financial crisis from a Senate subcommittee mirrors the Financial Crisis Inquiry Commission's report in that it blames credit ratings agencies for unleashing the market madness that consumed investors three years ago.
The Senate Permanent Subcommittee on Investigations released findings from a two-year study this week, saying "inaccurate triple-A credit ratings" from Standard & Poor's and Moody's Investors Service introduced risk into the financial system and "constituted a key cause of the financial crisis."
The report went a step further alleging that massive downgrades made by the credit ratings agencies a few months before the financial meltdown "precipitated the collapse of the residential mortgage backed-securities and CDO secondary markets" since the changes were "unprecedented in number and scope." The report added that "more than any other single event (the downgrades) triggered the beginning of the financial crisis."
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