<span>The securities rating industry has been heavily criticized for its subprime mortgage ratings that performed so poorly during the 2007-9 subprime crisis. This chapter traces the history of Moody's bond ratings since their inception in 1909. The stated purpose of the ratings was as an aid in investment analysis with the large number of U.S. securities outstanding at the time. However, evidence is reviewed that the Great Depression was a turning point for ratings, with a switch in focus from

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... investment analysis to default analysis. The ratings during this period were compared with a structural default analysis in terms of their ability to rank order defaults that occurred during the Great Depression. The conclusion is that advances in finance has created technologies that tend to outdate the ratings technology. </span>