Credit rating agencies face investigation by the EU

CREDIT rating agencies are being investigated by the EU, as they are suspected of having conflicts of interest and timing their downgrading of euro area countries to suit some of their clients.

There are growing fears that Moody’s latest step — downgrading Portugal to junk status just as they begin to implement a major austerity programme — could lead to Ireland suffering also.

This was compounded by Standard & Poor’s warning that they would regard a French bank plan to rollover private investor debt in Greece as a default. This would threaten the latest Greek rescue and bring the country closer to default.