Wall Street ratings firms had an incentive to give overly rosy ratings to collateralized debt obligations because the firm received a higher fee for giving higher ratings.

Question

Quizplus · Accepted Answer

This statement is true. Wall Street ratings firms received higher fees for giving higher ratings to collateralized debt obligations, which created an incentive for them to give overly rosy ratings, contributing to the 2008 financial crisis.

Wall Street Ratings Firms Had an Incentive to Give Overly