Motivation is not fact

Author: | Published: 1 Jul 2008

It's easy to mistake a motive for evidence. The error was made in the debate about ratings agencies. The big question was whether they understood the structured products they rated, and therefore whether they should change the way they do so in the future. But much of the debate revolved around advisory work – whether there were conflicts of interest in advising companies on how to improve their rating.

Conflicts of interest capture attention. They have the whiff of corruption. So even though the debate over advisory services was many years old,...