S&P drops second downgrade clanger on Goldman Sachs

Standard & Poor’s (S&P) has risked further criticism after the ratings agency was forced to retract a ‘downgrade’ for US investment bank Goldman Sachs.

Details posted on the agency’s website suggested Goldman had been downgraded from AA- to A+ but in an embarrassing admission a spokesman for the agency said there had been no change to the bank’s rating.
Details posted on the agency’s website suggested Goldman had been downgraded from AA- to A+ but in an embarrassing admission a spokesman for the agency said there had been no change to the bank’s rating.

The mistake echoes a similar error on November 10 when S&P mistakenly announced that France’s AAA sovereign rating had been downgraded and was subsequently forced to retract the statement.

At the time S&P said it was investigating what had gone wrong, while French market regulator AMF also said it was looking into the error which was met with widespread anger in the European country.

The mistake came on the same day that yields between French and German bonds hit a record high and amid growing doubts over the country’s AAA rating.

The provenance of the latest error remains unclear, with no obvious catalyst. An S&P spokesman said the agency was looking into how the error occurred.

Nevertheless the mistake will be particularly painful as it comes at a difficult time for the ratings agencies which are already under pressure amid questions over whether they have undue power in shaping financial markets.
Michel Barnier, the European commissioner, has pushed hard for curbs on the ratings agencies’ powers. Earlier this month, Mr Barnier used S&P’s decision to place 15 eurozone nations on credit watch as an excuse to warn that markets and economies should not become over-reliant on the agencies.