Moody’s just said that it would attend a regulatory hearing on rating agencies this week after all.
We guess they didn’t like the idea mentioned by angry New York Deputy Superintendent Hampton Finer, who said over the weekend that he would consider stripping the agency of its status as an acceptable ratings agency for use by insurance companies.
He told Reuters that “”If we don’t feel like we can get answers to our questions, the question is if we should put them on our ARO (acceptable rating organisations) list,” said Finer.
Unfortunately, this might actually be a step backward. We need regulators and financial companies to be less reliant on the ratings agencies. Having insurance regulators scratch the name Moody’s off the list would have been a step in the right direction. Now the danger is that Moody’s will show up, act contrite and return to business as usual.