A Senate panel is opening a probe into the causes of the global financial crisis, examining in particular the role of bond-ratings agencies, the Wall Street Journal said Thursday.
The US Senate's Permanent Subcommittee on Investigations will examine "whether bond-ratings firms, driven by conflicts of interest, boosted mortgage investments that have since collapsed," the paper said.
Investigators want to know if competition among the firms led them to issue certain ratings to win businesses from banks, Senator Norm Coleman, the committee's top Republican, told the paper.
"We're going to look at the root causes of this, looking at whether the inherent conflict clouded the judgment of the agencies," Coleman said. "Somebody missed something here. Was it because of the complexity or was it in the zeal to make money?"
Since the start of the sub-prime mortgage mess in the United States, the first domino to fall in the global financial crisis, fingers have frequently been pointed at the rating agencies, which evaluate the solvency of loan-seeking businesses and banks.
Earlier this month the European Commission proposed concrete steps to boost oversight of the industry.
The Securities and Exchange Commission, the US stock market regulator, in July accused the major bond-rating agencies -- Moody's, Standard & Poor's and Fitch -- of allowing conflict of interest to interfere with their work.
While their role in the collapse of insurance giant AIG and Lehman Brothers bank has already been scrutinized, "the Senate subcommittee's investigation is expected to go more deeply into the matter," the Journal said.
