Moody's CEO -- "A lot of things could have been done better..."

RAYMOND MCDANIEL, CHAIRMAN AND CEO, MOODY'S:

"A lot of things could have been done better - some are the responsibility of rating agencies, some of other participants in the market.

"In hindsight it is pretty clear to us there was a failure in some key assumptions supporting our analytics and our models. The key assumptions failed in part because the information policy - completeness and veracity - feeding the work agencies were doing, was deteriorating.

"The history demonstrates that investment grade structured products have demonstrated lower average loss than similarly rated corporate loss. But loss distribution for structured products has been different.

"We are currently regulated by the US SEC. We are also subject to reviews on a voluntary basis and various national regulatory authorities around the world.

"The defence (to accusations of opacity) is we publish our models - people can agree, disagree, disregard the assumptions in those models. The transparency is there and is publicly available.

"Some of the losses or writedowns are a recognition of a problem in the model."A downgrade, while it causes...a trading loss to someone selling on the secondary market, does not affect underlying quality.

"You may see large amounts of writeups as the market stabilises.

"By analogy, if rating agencies were rating houses, we would be rating structural soundness of the house -- but many other things go into the value of the house; We are only measuring its structural soundness.

"I want the institutional investor community to use our ratings, but if the only choice is to look to rating agencies, it makes us more necessary and less effective."