Many reputed rating cos in US under fire

FE Team | Published: November 22, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

From Fazle Rashid
NEW YORK, Nov 21: Everything seemingly have gone awry during the devastating economic meltdown. Many have failed to keep their cool under growing pressure. Three very reputed rating companies have come under fire. The number of ragulators at the banks are increasing as both management and regulators previously failed to spot banks risks.
The State of Ohio is suing three US rating agencies namely Standard and Poor's, Moody's Investors Service and Fitch Ratings accusing them of wreaking havoc in the financial markets by furnishing inflated ratings costing the State hundreds of millions of dollars. Improper ratings has cost the state more than $475 million. Rating companies are being blamed for both the credit boom and bust because they failed to spot the risks.
Morgan Stanley has a horde of full time regulators as Wall Streeters failed to control themselves. The bank now has 40 full time regulators and 20 of them deputed by the Fed Reserve. The banks have agreed that presence of regulators have bolstered their risk management. But if the crisis came about because nobody was on the lookout for danger, the next could instead arise because everyone assumes that the other guy is on guard, John Mack, the outgoing CEO of the bank was quoted as saying.
Wolfgang Schauble finance minister of Germany shared the concern of his Chinese counterpart over low US interest rates and a weak dollar are raising the spectre of a fresh global asset price bubble. Ben Bernanke , the US Fed Chairman has assured, that the bank is monitoring currency markets and " will conduct policy in a way that will help ensure that the dollar is strong"
The European Central Bank (ECB) has become impatience to unwind the emergency steps taken to confront the economic crisis. The bank is cautious about economic prospects but sees financial markets recovering and believes in executing its exit strategy will risk creating asset price bubbles.