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The banks need the good ratings to then sell their products. and investors buy and sell based on these ratings. so the rating agency -- >> in other words, there might be a bund of mole of mortgages they have rated them as the top risk, aaa rated, low risk, but somehow the conflict here is that the credit rating agencies are getting paid by the banks. >> well, and, ali, we now know that 93 % of the subprime mortgage bundled products were rated aaa. subprime by definition means subprime, that it's not aaa. >> right. >> so we now know that a lot of these products were rated top quality products f...

Talking to the rating agencies. how did these 10,000 of these securities that are aaa rated end up as junk. the final piece of puzzle is, the folks on wall street. they maybe these mortgages up and send them up to wall street. wall street put together and package and sell them. that's the part that i think we're focusing on and the committee has done a great job putting together e-mails. one of the things, ali, the big point i make, we know from washington mutual 90% of the home equity loans were stated income loans. >> you don't have to prove what you earn. >> you can go in the bank. >> so i ...

Aig was a multinational aaa rated. if you go back at this, when i tried to press on the ethical consideration, should you step back in '06 and '07 or somebody else at the treasury and said look, we are counterparting with these guys and they may look good for the money, but it is our civic or ethical or patriotic responsibility to tell you that this can take the entire system down. that didn't really cut with goldman executives. they didn't believe they had that responsibility or there was any way of doing it. >> these are people directly responsible for risk and the more risk they take, the m...

Latest updates on this topic from reliable sources.

Latest updates on this topic from reliable sources.