Credit Enhancement

NEW YORK, June 3, 2010 (AFP) - Credit rating agencies came under fire for their role in the global financial crisis Wednesday, as US investigators grilled senior industry figures, including mega-investor Warren Buffett.

Answering allegations that rating firms helped propel the sale of risky investments that poisoned the global financial system, senior officials from Moody's admitted mistakes were made, but denied any wrongdoing.

Buffett, who holds a major stake in Moody's, said the agency had "made the wrong call" in assessing some complex financial products but firms that failed after buying dubious products should shoulder most blame.

"Financial institutions that have failed and have required the assistance of the federal government... the CEOs should basically go away broke, and I have said I think his spouse should go away broke," he added.

The powerful "big three" raters -- Moody's, Standard & Poor's and Fitch -- have been accused of blithely awarding mortgage-backed securities their lucrative "AAA" investment ratings simply to net more business.

These top ratings are often seen as a seal of approval by investors and a sign that a company, country or debtor will pay back borrowed cash on tim

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