WASHINGTON - Members of the House Committee on Oversight and Government Reform blasted the major rating agencies for their role in the financial crisis yesterday, claiming internal memos showed they knew the entire financial system could be placed in jeopardy because of their unduly high ratings for subprime-related debt.

The lawmakers voiced their criticisms at a hearing, during which panel member Rep. Diane Watson, D-Calif., asked officials from Standard & Poor's, Moody's Investors Service, and Fitch Ratings about California Treasurer Bill Lockyer's complaints that the agencies rate corporate debt higher than municipal debt, despite lower muni bond default rates. She asked each agency to submit in writing what standards they use to rate municipal bonds.

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