Buffett defends rating agencies for missing crisis

By: AP
By: AP

NEW YORK -- Billionaire investor Warren Buffet says few could have predicted the depth of the housing crisis and that CEOs of rating agencies shouldn't be fired for missing the warning signs.

Buffet is testifying before the congressionally chartered Financial Crisis Inquiry Commission alongside Moody's Corp. CEO Raymond McDaniel. Buffett's investment firm is Moody's largest shareholder.

Rating agencies have been criticized for giving high ratings to complex investments backed by risky mortgages. When homeowners defaulted, the agencies downgraded billions of dollars of investments at once. That helped spark the financial crisis.

"They made the wrong the call," Buffett allowed, but added: "The entire American public was caught up in the a belief that housing prices could not fall dramatically.

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