Fool analyst Anand Chokkavelu breaks down Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett's thoughts on the rating agencies and suggests a company that may be coming to eat their lunch.

After being subpoenaed, Buffett recently came to Washington, D.C., to appear in front of the Financial Crisis Inquiry Commission. Why did he have to be subpoenaed? Because no fewer than eight government committees have asked him to appear in Washington over the last year and a half or so. Not surprising. After all, why wouldn't you invite Buffett? Though he was a reluctant witness, he answered the Commission's questions gamely.

The topic of the day was the role of the rating agencies in the financial crisis. To get you up to speed, the rating agencies gave housing-related debt and securities ratings that were way too high during the crisis. Why was this so harmful? The government only recognizes the ratings of a handful of firms (Moody's (NYSE: MCO) and McGraw-Hill's (NYSE: MHP) Standard & Poor's chief among them) when it assesses regulatory compliance. For example, when calculating a bank's regulatory capital reserves, banks get more credit for higher-rated securities.

Before we get to his thoughts, keep in mind that Buffett isn't a disinterested party. Through Berkshire Hathaway, he's the largest investor in Moody's. He defended the rating agencies by pointing out that few saw the magnitude of the crisis coming -- including Buffett himself. He also noted that there isn't an easy fix to the current system. For example, opening up the market to more ratings agencies could spur a race to the bottom -- in other words, if you're a company looking for a rating, you'll go to the rating agency that is likely to give you the best rating. Or the cheapest price, regardless of the thoroughness of the rating.

So no huge insights from Buffett on how to fix the system. But what about the rating agencies from an investing standpoint?

Well, Buffett's been selling shares of Moody's for the last year or so, taking his holdings down by over a third. Why's he selling? All this attention may spark regulation that takes away Moody's government-mandated moat -- as well as that of Standard & Poor's. If you're looking for a possible opportunity in the space, check out Morningstar (Nasdaq: MORN). It's a trusted name, and it has been making moves to get into the debt rating business.

You can see the video here:

Anand Chokkavelu owns shares in Berkshire Hathaway. You can follow Anand on Twitter. Berkshire Hathaway and Moody's are Motley Fool Inside Value selections. Berkshire Hathaway, Moody's, and Morningstar are Motley Fool Stock Advisor picks. Motley Fool Options has recommended writing puts on Moody's. The Fool owns shares of Berkshire Hathaway and Morningstar. The Motley Fool has a disclosure policy.