The heads of leading agencies were accused by a House of Representatives committee of ignoring warnings signs, following the "delirious mob" on Wall Street and failing to find "the icebergs always waiting in the world's financial sea lanes."
At one point, a panel member produced a message from an employee of leading agency Standard & Poors in the structured finance division who complained that deals "could be structured by cows and we would rate it."
S&P President Deven Sharma called the bovine reference "inappropriate," but said it showed that the company encouraged its analysts to raise concerns.
Ratings agencies are in the line of fire from lawmakers because they are widely blamed for failing to raise concerns about securities backed with subprime mortgages, which are the primary source of the financial crisis.
Ratings agencies have a key role in the financial system, assigning ratings to securities to reflect their inherent risk for investors.
In the subprime debacle, ra