mgmt 326 case study 2

mgmt 326 case study 2 - verification of the mortgage data...

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Moody's conflict of interest was between the market share and ratings quality. They needed to win the business and maintain market share or they cease to be relevant. On the other hand, their reputation depended on maintaining the ratings quality. The Principal was Moody's and The agents were the Managing Directors who were handling the conflict of interest on behalf of Moody's. Since McDaniel claimed that the investors as well as the issuers had an interest in influencing bond ratings, in order to eliminate or reduce the conflict of interest, Moody's should have demanded
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Unformatted text preview: verification of the mortgage data or refused to rate the securities without data provided. Instead of doing this they favored other methods of managing potential conflicts. Source(s): http://www.nytimes.com/2008/04/27/magazine/27Credit-t.html?pagewanted=all http://activerain.com/blogsview/759335/did-the-ratings-agency-s-create-a-triple-a-failure-http://www.huffingtonpost.com/2010/07/01/moodys-credit-rating-cut_n_632777.html...
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This note was uploaded on 02/20/2012 for the course H/A 121 taught by Professor Alamo during the Spring '12 term at Morgan.

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