Columnist Dennis K. Berman explains how a recent power play by the major credit rating agencies revealed their weakness. After the Dodd-Frank act passed, the agencies refused to let issuers use their credit ratings, which are legal requirements in the world of asset-backed securities. The move brought the market to a halt. "Yet what looks like a demonstration of political and market power is anything but," Berman writes. "In fact, it speaks to the raters' own weakness that their greatest leverage comes after an inconvenient, if unintended, short-circuiting of the bond markets."
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