S&P Sends Erroneous French Downgrade Message

November 21, 2011 by · Leave a Comment
Filed under: S&P, Uncategorized 

The difficult position that the rating agencies find themselves with regard to the European Union (EU) grew worse when Standard & Poor’s (S&P) inadvertently sent a message suggesting in which France’s AAA bond rating with a stable outlook had been downgraded.

A spokesperson for S&P emphatically stressed that the message was a technical error and cited the fact that France’s AAA rating on the agency’s web site was never changed. The error did cause French bond yields to rise slightly higher.

CNN quoted the blistering comments by European Commissioner Michel Barnier: “This incident is serious and it shows that in the current tense and volatile market situation, market players must exercise discipline and demonstrate a special sense of responsibility.”

The EU is already considering regulation to increase transparency and oversight for how rating agencies evaluate sovereign debt. The agencies strongly oppose these changes; however this snafu is likely to make regulators’ positions still more difficult.

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