Both the SEC and Senate Permanent Subcommittee on Investigation want greater scrutiny of bond rating agencies and their role in the current financial meltdown. The Wall Street Journal reports today that the Senate subcommittee is set to begin an investigation focusing on whether competition among bond-rating agencies led to the issuance of misleading ratings so they could win lucrative contracts from investment banks selling these securities. The SEC wants to crackdown on this possible conflict of interest and is considering rules that would deal with conflicts of interest at bond rating agencies.

Senator Norm Coleman, ranking member of the subcommittee, told the Journal, "We're going to look at the root causes of this, looking at whether the inherent conflict clouded the judgment of these agencies. Somebody missed something here. Was it because of the complexity or was it in the zeal to make money?"

Even if the fault of the errors lie in the complexity of the product, the bond rating agencies still failed everyone who depends on them for making investment decisions. The bond rating agencies should not rate something they find too complex to competently rate. Unfortunately, by doing so they destroyed everyone's trust in their competency to rate securities in the future. Obviously, they were just looking to make the bucks with very little concern for the people who depended on their abilities to rate bonds.