1. Do you think that credit rating agencies had the incentive to rate securities highly even if they were risky?
2. Should credit rating agencies such as Standards and Poor’s be forced to pay for their erroneous ratings?
3. What can credit rating agencies do to ensure that their ratings remain objective?

Credit rating agencies are facing regulatory scrutiny for actions leading up to the 2008–2009 financial crisis. Standard and Poor’s, Moody’s Investors Services, and Fitch Ratings are three major credit rating agencies, holding approximately 95 percent of the market share. Credit rating agencies provide investors with a credible and accurate evaluation of the risk of debt securities. The U.S. government has sued Standard and Poor’s for $5 billion, alleging that it rated CDOs higher than they should have been. Of the approximately 75 percent of the debt securities rated at AAA (the highest rating), more than 70 percent of them defaulted. In defense, the agencies argue that committees determine ratings rather than individual analysts and compensation is not dependent upon ratings.