Wither the ratings agencies?

When the dust finally settles on the wreckage of the financial system once the current storms have subsided one area the spotlight of scrutiny and blame will fall on will be the ratings agencies.
Listening to several well informed MPs and peers talking last night it is clear that they are getting a little tetchy at hearing the very tired refrain "But the ratings agencies said they were AAA". They are entitled to feel this way.
How many times have we heard people hide behind the ratings agencies when financial institutions hit the rocks? And how many times have the ratings agencies failed to do their jobs adequately? I struggle to recall the collapse of an insurer, bank or savings fund clearly predicted by the ratings agencies. Yet, people have continued to put their faith in them, a faith that for so many has now proved cruelly misplaced suspect many politicians.
Should they be regulated? Should they be expected to contribute to the compensation of people who have lost money investing in the Icelandic banks festooned with those once comforting 'A's? Should their role be taken over totally by a regulator? These are some of the questions that MPs of all parties are asking.
The agencies need to reassess urgently what their role is going to be in the future and how they are going to perform it better because these questions - and the grave doubts about the competence and adequacy of the current system that lie behind them - will not go away.