A. Because Congress charters them

JEROME S. FONS and FRANK PARTNOY ask:

Why, more than a year into the crisis, do regulators and investors continue to rely on ratings? No one has been more wrong than Moody’s and S&P. Less than a year ago both gave high ratings to 11 of the largest distressed financial institutions. They put the insurance giant A.I.G. in the AA category. They rated Lehman Brothers an A just a month before it collapsed. Until recently, the agencies maintained AAA ratings on thousands of nearly worthless subprime-related securities.

Here is the link to the SEC's regulations on Nationally Recognized Statistical Rating Organizations ("NRSROs"). Any more questions?