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by lisper
3498 days ago
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We actually have a data point: this is exactly what happened during the financial crisis, when ratings agencies sold fraudulent ratings on mortgage-backed securities. There is no way to structure a compensation structure so that reliable ratings information can be provided on the open market because there is no way to restrict the flow of information only to those customers who have paid for it. Perverse incentives of some form are thus inevitable. |
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