The Guardian

Police raid Milan offices of Moody’s and Standard & Poor’s
The Guardian

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.

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 ».

Standard & Poor’s came under scrutiny in May after it threatened to downgrade Italy’s credit rating because of its huge public debt. Italy is proportionately the second most highly indebted country in the eurozone after Greece.