		<div class="wpcnt">
			<div class="wpa">
				<span class="wpa-about">Advertisements</span>
				<div class="u top_amp">
							<amp-ad width="300" height="265"
		 type="pubmine"
		 data-siteid="111265417"
		 data-section="1">
		</amp-ad>
				</div>
			</div>
		</div><p>The world&#8217;s second-largest credit ratings agency has agreed to pay nearly $864m to settle US government and state claims that it gave inflated assessments to risky mortgage investments in the years leading up to the financial crisis.</p>
<p>The deal was struck by New York-based Moody&#8217;s with the US Justice Department and the attorneys general for 21 states and the District of Columbia on Friday.</p>
<p>It calls for $437.5m to go to the Justice Department and $426.3m to be divided among the states and the District of Columbia.</p>
<p>Moody&#8217;s, along with the other two major rating agencies &#8211; Standard &#038; Poor&#8217;s and Fitch &#8211; were widely criticised for giving low-risk ratings to the risky mortgage securities being sold ahead of the crisis, while they reaped lucrative fees.</p>
<p>In the settlement, Moody&#8217;s admitted that it did not follow its own standards in rating the risk of securities backed by home mortgages and the collateralised debt obligations that relied on their health.</p>
<p>The system spread the risk of mortgage defaults to banks around the world and led to a string of financial collapses in 2008 when people began defaulting on risky sub-prime loans.</p>
<p>That caused the housing market to implode in many areas and sparked the worst US recession since the Depression.</p>
<p>Moody&#8217;s acknowledged that it used a more lenient standard for certain financial products and did not make public the differences from its published standards.</p>
<p><i>&#8220;Moody&#8217;s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession,&#8221;</i> principal deputy associate attorney general Bill Baer said.</p>
<p>Under the settlement, Moody&#8217;s agreed to a number of reforms designed to make sure its credit ratings are objective, including separating commercial and credit rating functions; ensuring changes to its rating methods are independently reviewed and that some employees are not compensated based on Moody&#8217;s own financial performance.</p>
<p><i>&#8220;The agreement acknowledges the considerable measures Moody&#8217;s has put in place to strengthen and promote the integrity, independence and quality of its credit ratings,&#8221;</i> Moody&#8217;s said in a statement.</p>
<p><i>&#8220;As part of the resolution, Moody&#8217;s has agreed to maintain, for the next five years, a number of existing compliance measures and to implement and maintain certain additional measures over the same period.&#8221;</i></p>
<p>The agreement comes two years after Standard &#038; Poor&#8217;s, the world&#8217;s biggest ratings agency, agreed to pay nearly $1.4bn to settle similar allegations by the Justice Department, 19 states and the District of Columbia.</p>
<p>With the District of Columbia, the states involved in Friday&#8217;s settlement are Arizona; California; Connecticut; Delaware; Idaho; Illinois; Indiana; Iowa; Kansas; Maine; Maryland; Massachusetts; Mississippi; Missouri; New Hampshire; New Jersey; North Carolina; Oregon; Pennsylvania; South Carolina; and Washington.</p>
			<div style="padding-bottom:15px;" class="wordads-tag" data-slot-type="belowpost">
				<div id="atatags-dynamic-belowpost-68ed7ab93a279">
					<script type="text/javascript">
						window.getAdSnippetCallback = function () {
							if ( false === ( window.isWatlV1 ?? false ) ) {
								// Use Aditude scripts.
								window.tudeMappings = window.tudeMappings || [];
								window.tudeMappings.push( {
									divId: 'atatags-dynamic-belowpost-68ed7ab93a279',
									format: 'belowpost',
								} );
							}
						}

						if ( document.readyState === 'loading' ) {
							document.addEventListener( 'DOMContentLoaded', window.getAdSnippetCallback );
						} else {
							window.getAdSnippetCallback();
						}
					</script>
				</div>
			</div>
Discover more from London Glossy Post
Subscribe to get the latest posts sent to your email.
