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US: Nation’s lawsuit against S&P conflicting for competition

By  |  February 6, 2013

As the US has filed a suit against Standard & Poor’s for allegedly deliberately misrepresenting their ratings to investors as objective, national policies have been adopted that prohibit competition within the ratings market, say some analysts. While reports say that the lawsuit against S&P is, in part, an effort to increase competition in the ratings industry, the 2006 Credit Agency Reform Act similarly intended to open the field to new competitors and startups in the market has turned out to do the opposite, say analysts. The law, says one analysts, “reinforces the position of the big three,” meaning Standard & Poor’s, Moody’s Investors Service and Fitch Ratings – the three combined provided 96 percent of all government and company ratings in 2011.

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