Calculating debt
Calculating debt - 
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Steve Chiotakis: Executives from Standard & Poor's and Moody's are before Congress at the moment, getting grilled about their close proximity to economic crises. Including the housing crisis and their ratings for mortgage-backed securities. Then there's the drama that continues to unfold with the U.S. debt ceiling. Those agencies may again play a key role in the economy by downgrading U.S. credit. One of the people testifying today is Professor Lawrence J. White of the Stern School of Business at New York University. He's with us now. Professor, good morning.

Lawrence J. White: Good morning.

Chiotakis: What are you planning to tell the panel today?

White: Dodd-Frank act is at its one year anniversary -- a major piece of the Dodd-Frank act was to eliminate the automatic use of ratings for safety and soundness regulation of banks and pension funds and money market mutual funds. And that elimination is all to the good.

Chiotakis: Why do we still care what the agencies have to say?

White: They messed up big-time with mortgage related securities. And in that area their reputation was clearly shot. But, in the area of corporate bonds, the area of municipal bonds, the area of sovereign debt -- which U.S. treasury bonds -- are in that category. Their reputations are still intact.

Chiotakis: Can't we blow up the system when is so clearly doesn't work? Especially as you mentioned in the mortgage-backed securities?

White: I would love to blow up the system. Unfortunately, regulators have found this reliance on ratings to be an easy thing to do. The regulators have an easy route right now, they are reluctant to change.

Chiotakis: Professor Lawrence J. White of the Stern School of Business at New York University. Professor, thanks.

White: Thank you.