Moody's, the rating agency, proposed measures yesterday to help ensure that mortgage lenders provide more complete and accurate borrower information than they did during the sub-prime lending boom. Financial Times
The move follows months of debate among regulators on how to improve the performance of rating agencies, who have been accused of failing to warn investors of the subprime problems last year. Moody’s, together with rival agencies Standard & Poor’s and Fitch, have come under fire for granting high ratings to mortgage-backed bonds that have since suffered dramatic losses.
Warren Kornfeld, managing director of the asset-backed securities group at Moody’s, said: 'Everyone we’ve spoken to is trying to restore confidence in the market, which is what these measures are really about.'
If issuers fall short of the requirements, Moody’s may not assign its highest investment-grade ratings or could decline to rate transactions.