Italy Prepares to Open Case Against Rating Agencies

Prosecutors in Italy are preparing to reopen the wounds of the eurozone debt crisis as they fight a crisis-era downgrade that put Italian creditworthiness level with Kazakhstan’s.

Five employees from global credit rating agency Standard & Poor’s and one from Fitch are accused of inflicting unjustified damage to Italy for their role in credit rating decisions in 2011 and 2012.

The case is a late addition to the global lawsuits that have been raised against the world’s largest credit rating agencies for their role in the financial crisis.

What marks the trial sought in Trani, southern Italy, as unusual is that individual employees are being accused alongside the agencies, although given the time lag since Italy’s rating downgrade a number have since left S&P and Fitch and now work elsewhere.

Italians are sceptical. Last year, Italy’s state auditor was roundly mocked for suggesting it could claim more than €200 billion in damages because S&P did not take Italy’s history, art and landscape into account when downgrading the country. Since 2012 the country’s rating has fallen still further to one notch above junk status as a result of weak economic growth and one of the largest burdens of debt in the world.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza