Posted on 08/05/2011 4:51:12 AM PDT by No One Special
Chief prosecutor of Trani conducts investigation into whether the two rating agencies abide by regulations
As stock and bond markets across the world tumbled on fears about Italy and Spain, it emerged that police acting on orders from prosecutors had raided the Milan offices of rating agencies Moody's and Standard & Poor's as part of continuing investigations into their role in the recent financial turmoil.
Italian shares plunged on Thursday, with some leading firms losing more than 10% of their value. But the closing level of the benchmark FTSE MIB index was not released for reasons that remained unclear more than an hour after the close.
Among the factors behind the share fall was a widening of the risk premium on Italian state debt. The extra return demanded by investors for holding benchmark 10-year Italian bonds rather than the German equivalents touched 3.7 percentage points.
Carlo Maria Capistro – chief prosecutor of Trani, a small Adriatic port – told Reuters that his office was checking to see whether the rating agencies "respect regulations as they carry out their work". The raids took place on Wednesday as Italy's prime minister, Silvio Berlusconi, addressed parliament on the mounting crisis.
He and other leading Italian politicians often cite speculation as a cause of market storms that involve a run on the country's shares or bonds. And the media habitually depicts sell-offs as attacks on Italy.
S&P, which along with other rating agencies has been strongly criticised in Europe for downgrading countries such as Greece, said in a statement it believed the Trani inquiry "has no foundation". It added: "We shall strenuously defend our work, our reputation and that of our analysts."
Moody's said it took "its responsibilities surrounding the dissemination of market-sensitive information very seriously", and was co-operating with the authorities.
(Excerpt) Read more at guardian.co.uk ...
I can’t shed any tears for Moody’s or Standard and Poors. They are part of the international One-world Globalist Corporate Cabal which helped create this mess, and helped move American jobs overseas.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.