Securities regulators are investigating whether credit-rating agencies such as Moody's Corp. and McGraw-Hill Cos. unit Standard & Poor's followed proper procedures for rating mortgage-backed securities, Securities and Exchange Commission Chairman Christopher Cox told the Senate Banking Committee Wednesday. The agencies have been criticized for their ratings of the securities, but Cox said that the SEC has hasn't come to any conclusions about their explanations for unexpected losses on those assets.

"We have as yet formed no firm views on any of the reasons put forth by the credit-rating agencies, but we are carefully looking into each of them in the context of an examination the commission has begun" regarding credit-rating agencies active in residential mortgage-backed securities, he remarked.

While initially giving investment-grade ratings to many securities backed by subprime mortgages, ratings companies have downgraded those same securities, contributing to troubles in the credit markets.

"Some specific ratings were wrong, and the subsequent downgrading actions by the ratings agencies have had a serious impact on a significant sector of our financial system," said Sen. Richard Shelby, R-Ala., the committee's ranking Republican.

"There have been some precipitous downgrades to the credit ratings of securities in the subprime markets, creating significant market problems," said Sen. Christopher Dodd, the Connecticut Democrat who chairs the banking panel.