Moody’s Investors Service has delivered a statement to the Securities and Exchange Commission in advance of SEC hearings on issues relating to credit rating agencies and their role and function in the operation of the securities markets.

In the statement Moody’s president Raymond McDaniel concedes that the firm bears some of the blame for recent corporate scandals. “Over the past two years we have witnessed several high profile corporate scandals and bankruptcies that have reduced confidence in the U.S. capital market. In hindsight, failures can be observed at multiple levels. Some market participants initiated market destabilizing acts, some were complicit in allowing them to occur, and some – notably market watchdogs, including rating agencies – either did not identify or did not judge the severity of certain actions in ways that would have maximized investor protection,” McDaniel says.

He says the firm has undertaken substantial internal initiatives to enhance the quality of its analysis and the reliability of credit ratings. “Moody’s believes that the examination of our industry is appropriate and that it will encourage best practices and support the integrity and legitimacy of our service.”

McDaniel asks the SEC to remember the divergent needs and objectives of the various users of ratings.