Moody, S & P assigned to Goldman, UBS mortgage pressure, Levin, said

April 14, 2011, 7: 40 am EDT by Zeke false

(See details in the report of Levin, for {EXT2 })

April 14 (Bloomberg) - Moody Investors Service and Standard & Poor adjusted the way which they ranking securities after that Goldman Sachs Group Inc., UBS AG and at least six banks more pressure on them, according to a report of the Senate of United States .more large bond-classification of companies of two in the worldboth based in New York, made exceptions to the rules when bankers demand for better safety on complex mortgage-backed securities ratings, said yesterday the Subcommittee Permanent of the Senate investigations. When S & P and Moody has changed their assessments of hundreds of these obligations in July 2007, he helped trigger the financial crisis, the Group of experts said. "Rating agencies weakening their standards that each party to provide more favourable note to win business and a greater market share,"the report." "The result has been a race to the bottom".The findings of Cape investigation of two years on the financial crisis in which Senators questioned executives about the failures of Wall Street banks, regulators and mortgage loan companies. In a television audience last year, legislators compared to bankers Goldman Sachs of bookies and Subcommittee Chairman, Mr. Carl Levin their grilled on the marketing of securities. Levin Committee wants to eliminate rules shielding of Moody and S & P to be prosecuted on imperfect ratings and publish rankings of precision for companies, regulatory agencies. "Key Enablers'Levin and Republican Senator Tom Coburn from a. Oklahoma held four public hearings in 2010. The financial crisis Inquiry Commission also addressed the role of the ratings companies, calling it "Tools key of the financial crisis" in its January report.Based on mathematical models, Moody and S & P assigned AAA ratings to mortgage securities packaged during the five years real estate boom, finding safe Government bonds. Approximately 90% of AAA titles, supported by the sub-prime in 2006 and 2007 were more later downgraded to junk status, said Committee of Levin.Ces revisions have pushed banks, pension funds and insurance companies to sell holdingscontributing to 2 trillion dollars in asset writedowns and losses in the world.S & P ratings rejects of ResponsibilityLower "reflect unprecedented deterioration in credit quality, but were not a cause of it, Catherine Mathis, a spokesperson for S & P, said in a reply email to the conclusions of the Levin." "" We regret that, as many others, we did step provide the speed and extent of the decline of housing, which was the steepest decline since the great depression. "Michael Adler, spokesman of a Moody who had not seen the Levin report, refused to comment on.Gross Moody income rating complex products quadrupled to $ 260 million in 2006 from 61 million in 2002, the report of the Congress. For S & P, the number also quadrupled to 265 million in 2006 from 64 million dollars in 2002. "Investment bankers who complained of rating methodologies, criteria and decisions were often able to obtain exceptions or other favorable treatment,"according to the report Levin." The decisions appear to be "concessions made to prevent loss of business."Eight banks CitedThe Subcommittee released e-mails showing UBS, Lehman Brothers Holdings Inc., Citigroup Inc., Bear Stearns Cos., Morgan Stanley, Goldman Sachs, JPMorgan Chase & Co. and Nomura Holdings Inc. all pressures on the ratings companies to loosen standards for assessment of certain securities or to make exceptions.UBS said S & P that the levelling of securities, the Bank has been sold more prudent shifting business at Moody and rival Fitch Ratings, according to the findings of the Levin.Dans another case, a banker for Goldman Sachs objected to a rating S & P decision on a secured debt called Abacus 2006-12According to an e-mail message published by the Commission.S & P Director Chris Meyer to the first "pushed back" then "suggested that an exception could be made if it was limited to the order at hand", said the Committee .lucas van Praag, a spokesman for Goldman Sachs in New Yorkrefused to comment on.UBS, JPMorganMoody concessions made in 2007 when he notes: an agreement known as start II for UBS and exceptions to the three agreements of Bear Stearns in 2006, according to the report of. JPMorgan acquired Bear Stearns in 2008 as the company teetered on the verge of collapse.In 2007, Robert Miller of JPMorgan complained that Moody had intended to give an agreement a lower rating S & P. "It will be a difference of three notch when we print the deal if it comes out as is," Miller wrote in an e-mail to Mark Moody DiRienz. "I've already stirred on calls for investor I'm going to get."DiRienz replied that an analyst "focuses on a few adjustments of its methodology that should be an advantage for you folks."Jennifer Zuccarelli, a spokesman for JPMorgan, refused to comment before seeing the report, as did the UBS spokesman Kelly Smith.Flawed FeesLevin, a Democrat of Michigan, criticized the business model of the suppliers of ratings of collecting fees companies whose much they rate, comparing practice to "one of the parties in the Court pay salary of the judge." Ray McDaniel, the Moody President and Chief Executive Officer, said the Panel that these potential conflicts are well managed. "We, like many others, did not anticipate the confluence unprecedented forces that prompted the unusually low performance of subprime mortgages in the past years,"Said McDaniel prepared testimony."

-With the help of Jody Shenn and Christine Harper in New York and Jesse Hamilton and Phil Mattingly in Washington. Editors: Sharon l. Lynch, Pierre Paulden.

To contact the reporter on this story: Zeke forgery in New York at zfaux@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

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