I feel like credit agencies should receive more blame and public criticism for the collapse of Enron and AIG. The credit agencies did not do their job adequately and gave these companies a triple A rating when they did not deserve it. I understand that companies like Enron are so large and have very confusing financial statements so it’s hard to evaluate them. But in the end of the day, it is the job of the credit agencies to properly evaluate these companies regardless of their size. I feel like it is unethical to assign a company like Enron a AAA rating if they don’t deserve it. It took too many years for credit agencies to actually understand that these companies were falsifying their financial statements and misrepresenting their debt. Once AIG lost their AAA credit rating, the public lost trust in them and AIG began to collapse.
I feel like a credit agency should not be directly related to any company that they are evaluating. For example, a neutral agency like the government should pay these credit agencies so the credit agencies are honest. These credit agencies were in AIG’s business plan because AIG needed to receive the AAA rating. The public trusts that these credit ratings are accurate and truthful when they are looking to invest their money. If the credit agencies were not directly related to companies like AIG and Enron then the credit companies would do a better job at evaluating the credibility of these companies.