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At the risk of being dismissive: didn't Moody's also strongly suggest that banks and pension funds were underinvesting in junk-grade mortgage backed securities? Has anyone read the actual research note? Are there reasons to believe that Moody's is more credible here than they were in 2007?

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I'll try to read this research note. Maybe I'm biased. I used to work at Moody's and then 2 or so jobs later structured some pretty substantial bond issuances that they rated (and my manager at that gig came from S&P, and one of my colleagues quit to become an analyst at Fitch).

They have some very good analysts, not usually given to making policy type statements like this except where it impacts the issuer's revenue and capital structure that determines how well they're able to pay P&I on bonds. So without reading the note I would say it's pretty significant

Historically the big three agencies make money by charging a fee to the companies/entities they're rating. My understanding is that it's always been that way & things have not materially changed since 2007.

A good question to ask here is to what extent institutional debt buyers continue to rely on these ratings.

More background: https://corpgov.law.harvard.edu/2014/10/09/impact-of-the-dod...

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