Police raid Milan offices of Moody's and Standard & Poor's

Chief prosecutor of Trani conducts investigation into whether the two rating agencies abide by regulations
John Hooper in Rome
The Guardian
Aug. 08, 2011

Scumbag governments need scapegoats. - Chris, InfoLib

Related: Defending the SpeculatorAs 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.

Italian shares plunged on Thursday, with some leading firms losing more than 10% of their value. But the closing level of the benchmark FTSE MIB index was not released for reasons that remained unclear more than an hour after the close.

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". The raids took place on Wednesday as Italy's prime minister, Silvio Berlusconi, addressed parliament on the mounting crisis.

He and other leading Italian politicians often cite speculation as a cause of market storms that involve a run on the country's shares or bonds. And the media habitually depicts sell-offs as attacks on Italy.

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