Moddy's Meltdown

Moody's definitely did not act very responsible in the situation, but I wouldn't go as far to say they acted unethically. Hands down, Moody's was absolutely one of the top players, if not the top player, in the financial crisis, but there actions were not unethical. Moody's corporation was not intentionally trying to bring down the financial system, but rather being very generous with there loans. Moody's did not know they could possibly start another Great Depression, so if credit and income were sufficient from potential borrowers a loan approval was handed out. Fraud did not play a supporting role in Moody's decision to give out loan approvals, lack of research did, which is very irresponsible.

Moody's corporation bared the largest amount of responsibility for the crisis, and rightly so. The entire job of Moody's was completely centered around making sure loans could be paid back sufficiently and on time. Mortgage lenders and investment bankers trusted Moody's to do there job correctly. There wasn't a doubt in there mind when the loan approvals came back to the lenders and bankers because of Moody's impressive history. The Mortgage lenders and investment may have went over the peoples credit scores and financial statements but an approval from Moody's is all the really needed to feel assured. Another chunk of the responsibility went to the home buyers themselves. It was very irresponsible of the people to purchase homes they obviously couldn't afford. Also government regulators and policymakers took a chunk of the blame as well because there should have been laws and regulations enforced that preventing a crisis like this from ever happening.

Several steps can and should be taken so something like this has no chance of ever happening again. The world is still enduring the repercussions of this crisis and its almost five years after it occurred. First, home buyers need to be more responsible and less selfish and make sure they can afford monthly payments if...