Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/who-pays-the-rating-agencies Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Who Pays the Rating Agencies? Economy Apr 20, 2009 10:36 AM EDT Question: Who pays the rating agencies, like Moody’s? What is the source of their income? Paul Solman: That’s been the scandal. They’re paid by the issuers of the bonds and stocks they rate. They thus have a huge incentive not to rate too harshly, lest the client go to the “easier” agency. It’s the same problem auditors have. A free press is a cornerstone of a healthy democracy. Support trusted journalism and civil dialogue. Donate now
Question: Who pays the rating agencies, like Moody’s? What is the source of their income? Paul Solman: That’s been the scandal. They’re paid by the issuers of the bonds and stocks they rate. They thus have a huge incentive not to rate too harshly, lest the client go to the “easier” agency. It’s the same problem auditors have. A free press is a cornerstone of a healthy democracy. Support trusted journalism and civil dialogue. Donate now