Comment by: Anonymous. Posted 14 years ago [2009-04-29 15:13:19]

"Adjustments" in this case amounts more to "Overhauls". AIG indeed claimed it was using BET - however they could have never derived triple-A risk for their super-senior wraps from BET, had they used 1 industry as the diversity score (ie, residential mortgages...) BET could not be used for RMBS CDOs - that's why the rating agencies moved away from it. To what, you may ask? Correlation-based models, of course! We all know the results.

Comment by: Anonymous. Posted 14 years ago [2009-04-28 14:28:34]

Going into the crisis, AIG published that they used the BET model to value CDOs (had they heard or correlation models?). No wonder they had to make some adjustments...