The raid is seen as the eurozone government’s way of getting back at ratings agencies, which recently downgraded the credit rating of Greece, Portugal and Ireland.
Source: (AHN) Reporter: Vittorio Hernandez Location: Milan, Italy Published: August 5, 2011 05:58 am EDT Topics: Crime, Law And Justice, Inquiry, Politics, Government, Government Departments, Economy, Business And Finance, Financial And Business Service, Investment Service Italian authorities seized documents from the Milan offices of ratings agencies Standard & Poor’s and Moody’s Investors Service on Thursday. The seizure was part of an investigation that the two agencies were allegedly engaged in dubious movements in domestic share prices.
Carlo Maria Capistro, head of the prosecutor’s office in Trani which led the raid, said the action sought to verify if the two agencies followed Italian regulations in carrying out their business.
S&P and Moody’s said the probe has no basis. The raid is seen as the eurozone government’s way of getting back at ratings agencies, which recently downgraded the credit rating of Greece, Portugal and Ireland.
The political angle of the Italian raid becomes apparent since Italy and Spain are said to be on the list of nations due for a downgrade.
The Center for Economics and Business Research, a British think tank, forecast on Thursday that Italy would likely default on its debt, unless Rome registers an unexpected hike in its economic growth.
The center estimated Italy’s debt would reach 150 percent of the country’s yearly output by 2017 from the current 128 percent if the bond yields would be above the present 6 percent and growth remains flat. However, Italian Prime Minister Silvio Berlusconi told the Parliament on Wednesday that the nation’s economy is strong and its banks are solvent.
The center had a better outlook for Spain, which it said would likely avoid a default, unless Madrid would be dragged by the eurozone debt contagion.
Saturday, August 6, 2011
Italian authorities raid Milan offices of S&P, Moody’s | AHN
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