S&P's Credibility Crisis

A story about how Standard & Poor's lost credibility during the subprime mortgage crisis due to conflicts of interest.

"During the subprime crisis, these subprime mortgages and securitized housing bonds were rated AAA. People were questioning 'How is this rated AAA? This is like a junk bond.'

The issue was that the banks were funding Standard & Poor's. S&P was the rating agency, and they were the ones getting money funneled to them from the banks. They breached trust when the only thing they were providing was trust as a service.

They didn't actually lose their position though - they're still around and still one of the main rating agencies. But it shows what happens when you breach trust while being in the business of providing trust."