Conflicts of Interest + Billion Dollar Deals = Fraud and Corruption

An earlier post looked at the conflicts of interest that exist with rating agencies. The ratings agencies are paid for their services by the companies whose commercial paper and other securities they rate. It’s an obvious conflict of interest. Now, as Congress continues to investigate the causes of the financial meltdown, this is getting some attention.

The information provided is vitally important, and someone has to get paid to develop it. But the current system is obviously flawed, and this flaw helped us lose billions of dollars in the bailout of banks.

Hmmmm, let’s see, what’s an alternative? How about government regulation?