Fed chief attacks ratings agencies and investors

The chairman of the US Federal Reserve has blamed the credit crunch on ratings agencies and the sub-prime securities investors who believed them.

Ben Bernanke delivered the damning verdict as he stated the findings of the President’s Working Group on Financial Markets.

He says: “Investors often took insufficient care in evaluating the risks of structured credit products, in part because they over-relied on the evaluations provided by the credit ratings agencies.

“Investors must take more responsibility for developing independent views of the risks of sub-prime mortgage securities.”