According an article published in the Wall Street Journal in 2016, Moodys Investors Service has agreed to
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According an article published in the Wall Street Journal in 2016, “Moody’s Investors Service has agreed to pay $130 million to end a prominent lawsuit alleging crisis-era misconduct.” The article also noted: “The industry’s business model … remains in place.”
a. What is the industry’s business model?
b. Is there a relationship between the industry’s business model and the misconduct the rating agencies were accused of during the financial crisis of 2007–2009? Briefly explain.
c. Why does the industry’s business model remain in place?
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Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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