Just about everybody agrees that credit rating agencies played a part in the meltdown by making a habit of giving top-notch ratings to lousy investments. That criticism has come from a curious corner lately: the big financial firms. As a spokesman from Goldman Sachs told Bloomberg earlier this week, “Goldman Sachs and others relied upon the rating agencies to supply independent analysis and ratings.”

It’s an interesting argument, because Goldman and other firms often seemed to have pressured the agencies to give good ratings. E-mails released last week by the Senate investigations subcommittee give a glimpse of the back-and-forth (PDF).

"I am getting serious pushback from Goldman on a deal that they want to go to market with today," wrote one Moody's employee in an internal e-mail message in April 2006.

The Senate subcommittee found that rating decisions were often subject to concerns about losing market share to competitors. The agencies are, after all, paid by the firms whose products they rate.

Standard & Poor's certainly felt the pressure. One employee even tried to push back:

"The right thing to do is to educate all the issuers and bankers and make it clear that these are the criteria and that they are not-negotiable," wrote one S&P employee in June 2005. "Screwing with criteria to ‘get the deal' is putting the entire S&P franchise at risk -- it's a bad idea."

Jim Cox, a professor of securities law at Duke University, told me it's disingenuous for banks to pin the blame on the rating agencies, when they knew those ratings were compromised.

"They knew full well that those credit ratings were without meaning," said Cox. "They were paying for them. They knew the credit rating agencies were not conducting any form of due diligence."

But that's not a defense of the rating agencies, either, which often caved to the pressure while increasing risk to the financial system. From one S&P internal e-mail in December 2006:

"Rating agencies continue to create and [sic] even bigger monster -- the CDO market," one employee wrote. "Let’s hope we are all wealthy and retired by the time this house of cards falters. :0)"

In prepared testimony before the subcommittee, the CEO of Moody's, Raymond McDaniel, said the company is "certainly not satisfied with the performance of our ratings during the unprecedented market downturn of the past two years." He said that "neither we -- nor most other market participants, observers or regulators -- fully anticipated the severity or speed of deterioration that occurred in the U.S. housing market."

An S&P spokesperson told Reuters that the firm has "learned some important lessons" from the crisis and has made changes "to increase the transparency, governance and quality of our ratings."

Financial reform bills in both the House and the Senate would have rating agencies register with the Securities and Exchange Commission. The SEC is currently prohibited from overseeing them. Sen. Christopher Dodd's bill would create a new office within the SEC for this purpose. The bills would also allow investors to sue rating agencies for failure to properly analyze investments.

Neither the House nor the Senate bills, however, change the fact that credit rating agencies will continue to be paid by the firms whose products they rate. To that end, some, like The Washington Post’s Ezra Klein, have even suggested making the agencies public.