It's getting a tad uncomfortable for the credit rating agencies. People are wondering about their role in the global financial meltdown we're now suffering. The House Financial Services Committee will hold hearings next month. And the EU has opened a probe of the agencies and their response to the credit meltdown. The agencies exist to assess the credit worthiness of debt and--and this is a small thing--the credit-worthiness of debt-related instruments. That has been an area of growth for the agencies, powering their growth to whole new levels. Their ratings do not attempt to grade their stability or investment value. Still, people are wondering about their relationships with issuers and whether their opinions on various CDOs somehow played a role in the meltdown. The Ohio AG is looking into this. One could argue that buyers should take a closer look under the covers of these instruments. Apparently, some institutions have standing orders with traders to buy anything rated A or higher. I'll have a bit more tomorrow.  

For more:
- here's a Financial Times article