California has filed suit against Wall Street's biggest credit rating agency, Standard & Poor’s, charging the firm with violating the state's False Claims Act by using “magic numbers” and “guesses” to inflate ratings that ultimately cost California public pension funds an estimated $1 billion.
The action was filed Tuesday in San Francisco Superior Court and came a day after federal prosecutors filed suit against the bond-rating agency, alleging that S&P gave top marks to troubled mortgage-backed securities that later failed, helping to trigger the financial crisis.
Document: U.S. Sues Standard & Poor’s over mortgage bond ratings
Read more : California accuses S&P of deception in $4-billion lawsuit - latimes.com
Showing posts with label Rating Agencies. Show all posts
Showing posts with label Rating Agencies. Show all posts
11/14/12
Rating Agencies: Russia, China and US challenge rating agencies
A new agency is about to appear in the rating business that will be created by the Russians, Chinese and Americans. The agency Universal Credit Rating Group that claims to be a global player, came into being in Beijing and is the joint brainchild of the Chinese rating agency Dagong Global, the American Egan-Jones, and Russian RusRating.
Earlier, AFP reported that the Chinese rating agency Dagong planned to involve partners from the U.S. and Russia to build a new international rating agency, because the ratings of the "big three" (Fitch, Standard and Poor and Moody's), according to the Chinese side, are "inadequate." The U.S. called Dagong "inadequate", because, according to the American side, they cannot verify the adequacy of a company working in the PRC.
President of the agency Egan-Jones (USA), Sean Egan, said that excessive optimism of the U.S. agencies led to the crisis of the world economy. He added that the current rating system did not satisfy the needs of the investors. Earlier, the Financial Stability Board of G20 recommended reducing the influence of the rating agencies on investment decisions, and the U.S. Department of Justice and the Securities and Exchange Commission in July launched an investigation against the S &P, suspected of unreasonably high ratings of securities, including mortgage bonds of the U.S.
The three partner organizations of the new rating agency Universal Credit Rating Group (UCRG) emphasized that they did not represent the interests of any particular country or group. Compared to the "big three" credit rating agencies, the members of the new project are ambitious "youth." RusRating was established in 2001, Dagong Global - in 1994, and Egan-Jones - in 1995. The new structure will not be able to be a serious competitor to Fitch, Moody's and S&P in the near future. In this business reputation building takes a long time.
However, the national selection of the participants in this project looks very promising - they are the largest markets and economies around the world. It is no coincidence that over 30 credit rating agencies have expressed the desire to join the group. The company's headquarters will be located in Hong Kong, and the agency will start operating in the next six months. Egan-Jones and RusRating position themselves as agencies that use a business model different from the methods of the "big three."
Read more: Russia, China and US challenge rating agencies - English pravda.ru
Earlier, AFP reported that the Chinese rating agency Dagong planned to involve partners from the U.S. and Russia to build a new international rating agency, because the ratings of the "big three" (Fitch, Standard and Poor and Moody's), according to the Chinese side, are "inadequate." The U.S. called Dagong "inadequate", because, according to the American side, they cannot verify the adequacy of a company working in the PRC.
President of the agency Egan-Jones (USA), Sean Egan, said that excessive optimism of the U.S. agencies led to the crisis of the world economy. He added that the current rating system did not satisfy the needs of the investors. Earlier, the Financial Stability Board of G20 recommended reducing the influence of the rating agencies on investment decisions, and the U.S. Department of Justice and the Securities and Exchange Commission in July launched an investigation against the S &P, suspected of unreasonably high ratings of securities, including mortgage bonds of the U.S.
The three partner organizations of the new rating agency Universal Credit Rating Group (UCRG) emphasized that they did not represent the interests of any particular country or group. Compared to the "big three" credit rating agencies, the members of the new project are ambitious "youth." RusRating was established in 2001, Dagong Global - in 1994, and Egan-Jones - in 1995. The new structure will not be able to be a serious competitor to Fitch, Moody's and S&P in the near future. In this business reputation building takes a long time.
However, the national selection of the participants in this project looks very promising - they are the largest markets and economies around the world. It is no coincidence that over 30 credit rating agencies have expressed the desire to join the group. The company's headquarters will be located in Hong Kong, and the agency will start operating in the next six months. Egan-Jones and RusRating position themselves as agencies that use a business model different from the methods of the "big three."
Read more: Russia, China and US challenge rating agencies - English pravda.ru
2/22/12
Greece downgraded further to junk status
Greece was downgraded further by Fitch Wednesday as it scrambled to adopt a batch of emergency laws that will further cut incomes and government spending, a day after securing a new bailout and debt relief deal designed to stave off bankruptcy.
The new austerity measures demanded by creditors in return for the rescue loans follow two years of deepening misery, with the Greek economy in free fall, unemployment at a record high and the state of the public finances in worse shape than previously forecast. Angry unions have called two separate protest rallies outside Parliament in the afternoon.
On Tuesday, the 17-country eurozone approved Greece's second financial lifeline in less than two years, worth €130 billion ($172 billion), and a €107 billion ($141 billion) debt write down on banks and other private holders of Greek bonds.
Note EU-Digest: Fitch Ratings is obviously looking out for the financial industry, which unfortunately also include financial speculators, Together with the other US based financial rating companies they carry far too much weight as to the damage they can do to national economies. It is high time something gets done to curb their quasi importance and influence.
For more: Greece downgraded further - Business - CBC News
The new austerity measures demanded by creditors in return for the rescue loans follow two years of deepening misery, with the Greek economy in free fall, unemployment at a record high and the state of the public finances in worse shape than previously forecast. Angry unions have called two separate protest rallies outside Parliament in the afternoon.
On Tuesday, the 17-country eurozone approved Greece's second financial lifeline in less than two years, worth €130 billion ($172 billion), and a €107 billion ($141 billion) debt write down on banks and other private holders of Greek bonds.
Note EU-Digest: Fitch Ratings is obviously looking out for the financial industry, which unfortunately also include financial speculators, Together with the other US based financial rating companies they carry far too much weight as to the damage they can do to national economies. It is high time something gets done to curb their quasi importance and influence.
For more: Greece downgraded further - Business - CBC News
1/16/12
EU Barnier Lashes Out At S&P's Europe Ratings Downgrades - by Polly Hui
European Union Commissioner for the Internal Market Michel Barnier on Monday lashed out at Standard & Poor's move to downgrade nine of the euro zone's 17 member states at a time when those governments are working very hard to restore financial stability.
"I am surprised time and time again by the timing the rating agencies choose to make such announcements," Barnier told reporters in Hong Kong, adding that he wants to see rating firms operating with full transparency. "These rating agencies should have given their alerts five, ten years ago; not now," he said.
The commissioner added he wants the agencies to fully take into account such government efforts when issuing ratings. Nations in the euro zone are taking a "giant step" to improve governance through the regional integration of economic and financial policies, he said.
"This is not a crisis of the euro...The euro is here to stay," Barnier said.
For more: EU Barnier Lashes Out At S&P's Europe Ratings Downgrades - WSJ.com
"I am surprised time and time again by the timing the rating agencies choose to make such announcements," Barnier told reporters in Hong Kong, adding that he wants to see rating firms operating with full transparency. "These rating agencies should have given their alerts five, ten years ago; not now," he said.
The commissioner added he wants the agencies to fully take into account such government efforts when issuing ratings. Nations in the euro zone are taking a "giant step" to improve governance through the regional integration of economic and financial policies, he said.
"This is not a crisis of the euro...The euro is here to stay," Barnier said.
For more: EU Barnier Lashes Out At S&P's Europe Ratings Downgrades - WSJ.com
12/6/11
S&P, Geithner and Company: Stop mingling in EU Affairs
It all is starting to look like a lot of unwanted heavy handed US pressure on Europe.
Just days before EU leaders convene for a do-or-die crisis summit in Brussels, US based Standard and Poor's announced it was putting the sovereign debt of almost all eurozone countries, as well as the bloc's 440-billion-euro ($590-billion) bailout fund, on review for a possible downgrade. France, Germany, and leaders of all the 17 euro-zone nations were angered by Standard@ Poor's decision to put almost the entire bloc on credit watch, just as the single currency is desperately fighting for its survival. At the same time U.S. Treasury Secretary Timothy Geithner, on a trip in Europe, put even more negative pressure on Europe by saying that he was worried: "the eyes of the world are very much on Europe."
The German media turned on S@P for timing its announcement to coincide with this week's frantic search for a solution to Europe's debt crisis.The website of the German newspaper Handelsblatt reported resentment and indignation, with political and banking figures highly critical of the agency.
Christian Noyer, the president of Banque de France accused rating agencies of acting as "one of the motors of the crisis in 2008" and said it could be asked whether they were playing the same role now. Mr Noyer said that in the light of Monday's Franco-Germany agreement on far-reaching measures to tackle the crisis, the agency had mistimed its announcement as well as relying on methodology based more on political than economic factors.
Even outside the euro-zone, some eyebrows were raised. Alastair Campbell, who was press secretary to Tony Blair when the latter was British prime minister, said on Twitter it was time for television documentary makers to "shine a light" on ratings companies.
EU politicians have long been waging a war against the huge power of the rating US based ra6ting agencies and some denounced S@P's moves as a bid to deflect attention away from the United States' much bigger — and potentially even more dangerous — debt mountain.
Unfortunately the problem is that the U.S. media landscape is dominated by massive Wall Street traded corporations have , through a history of mergers and acquisitions concentrated their control over what people see, hear and read, not only in the US, but also around the world. In many cases, these giant companies are vertically integrated, controlling everything from initial production to final distribution. Recently they have turned their wrath against Europe, which has been actively trying to get the world to put stricter controls on free-wheeling Wall Street speculators, the banks and the financial community in general.
Said one EU parliamentarian: "We don't need US credit rating agencies here. As to Mr. Geithner, please pack your bags, go home and deal with your own country's problems. Don't tell Europe what to do.
EU-Digest
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Just days before EU leaders convene for a do-or-die crisis summit in Brussels, US based Standard and Poor's announced it was putting the sovereign debt of almost all eurozone countries, as well as the bloc's 440-billion-euro ($590-billion) bailout fund, on review for a possible downgrade. France, Germany, and leaders of all the 17 euro-zone nations were angered by Standard@ Poor's decision to put almost the entire bloc on credit watch, just as the single currency is desperately fighting for its survival. At the same time U.S. Treasury Secretary Timothy Geithner, on a trip in Europe, put even more negative pressure on Europe by saying that he was worried: "the eyes of the world are very much on Europe."
The German media turned on S@P for timing its announcement to coincide with this week's frantic search for a solution to Europe's debt crisis.The website of the German newspaper Handelsblatt reported resentment and indignation, with political and banking figures highly critical of the agency.
Christian Noyer, the president of Banque de France accused rating agencies of acting as "one of the motors of the crisis in 2008" and said it could be asked whether they were playing the same role now. Mr Noyer said that in the light of Monday's Franco-Germany agreement on far-reaching measures to tackle the crisis, the agency had mistimed its announcement as well as relying on methodology based more on political than economic factors.
Even outside the euro-zone, some eyebrows were raised. Alastair Campbell, who was press secretary to Tony Blair when the latter was British prime minister, said on Twitter it was time for television documentary makers to "shine a light" on ratings companies.
EU politicians have long been waging a war against the huge power of the rating US based ra6ting agencies and some denounced S@P's moves as a bid to deflect attention away from the United States' much bigger — and potentially even more dangerous — debt mountain.
Unfortunately the problem is that the U.S. media landscape is dominated by massive Wall Street traded corporations have , through a history of mergers and acquisitions concentrated their control over what people see, hear and read, not only in the US, but also around the world. In many cases, these giant companies are vertically integrated, controlling everything from initial production to final distribution. Recently they have turned their wrath against Europe, which has been actively trying to get the world to put stricter controls on free-wheeling Wall Street speculators, the banks and the financial community in general.
Said one EU parliamentarian: "We don't need US credit rating agencies here. As to Mr. Geithner, please pack your bags, go home and deal with your own country's problems. Don't tell Europe what to do.
EU-Digest
EU-Digest reports can be reproduced only
if EU-Digest is identified as the source
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