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US announces probe into S&P
THE US department of justice is investigating the ratings that Standard & Poor’s gave to dozens of mortgages in the run up to the financial crisis, amid concerns pressure was put on analysts to hike the ratings.
Though the investigation is said to have been underway since before the rating agency downgraded US debt from AAA to AA+ earlier this month, news of the probe has sparked talk of a government backlash against S&P – so far the only agency to change its US outlook.
The enquiry hinges on whether analysts’ ratings of mortgage-based loans were influenced or overruled by business managers within the agency.