Tuesday 12 December 2017

Furious France demands investigation ino Standard & Poor's email cock-up

AN angry French government has demanded an investigation of the Standard & Poor's ratings agency after the company erroneously sent an email suggesting that it had lowered France's flawless credit rating.

The episode caused turmoil in markets yesterday about the safety of France's sovereign debt.

President Nicolas Sarkozy, has been striving to ensure that financial contagion will not spread to France.

A priority of his coming presidential re-election campaign is to ensure that France's AAA rating stayed.

France's finance minister, Francois Baroin, quickly demanded an investigation into "the causes and eventual consequences of the error."

Within a half-hour, the French stock market watchdog said it would open one. It also notified the European financial market authority, which oversees "the professional obligations of the ratings agencies."

In a statement, S&P attributed the message to "a technical error" and affirmed that the rating was unchanged.

But the yield for France's 10-year benchmark bond jumped more than a quarter-point, to 3.48pc, and the spread between French and German bonds of that duration reached 170 basis points, a euro-era record, Bloomberg News reported.

The erroneous S&P message went out shortly before 4pm Paris time, and the correction was issued almost two hours later, after most European markets had closed.France, together with Germany, is one of the biggest financial contributors to the European effort to contain the debt crisis.

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