On the recordMay 13, 2010
I come to the floor to support the amendment of the Senator Franken, amendment No. 3808, along with his cosponsors. This will address a major unresolved cause of the financial meltdown. The cause which this amendment focuses on is the flawed and inaccurate credit ratings that labeled poor-quality mortgage-backed securities and high-risk collateralized debt obligations as AAA investments. AAA means they were on par, in the view of these rating agencies, with U.S. Treasurys. Investors from pension funds, to universities, municipalities, insurance companies, and more lost hundreds of billions of dollars, in part, because of these ratings. How did the credit rating agencies get it so wrong? A big part of the answer--one that would be remedied by the Franken amendment--is the inherent conflict of interest that now permeates the credit rating industry. I am going to read from a few e-mails we uncovered and disclosed at our hearings.
