Senator Elizabeth Warren sent letters to S&P Global, Moody’s, and Fitch Ratings, requesting insights into their credit risk evaluation processes. She noted that previous inflated ratings contributed to the 2008 financial crisis, highlighting the need for transparency regarding potential conflicts of interest.
The private credit market has surged, now approximately 700 billion USD, impacting traditional lending methods. JPMorgan’s CEO, Jamie Dimon, cautioned about resembling the risky pre-2008 mortgage landscape, stressing the urgency for oversight in this expanding marketplace.
Warren’s letters reflect growing concerns regarding the stability of the private credit market and the assessments by rating agencies. She is pushing for a thorough exploration of market size and risks, aiming to protect investors and ensure sustainable financial practices.
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