The parent of Standard & Poor’s (S&P) said that it is ready to fight the
brought against the credit ratings agency (CRA) earlier this month by the US Department of Justice (DoJ) alleging that its reviews of mortgage-backed securities issued before 2008 were overly positive and helped trigger the financial crisis.
“Rest assured, we will vigorously defend against these erroneous claims,” said Harold McGraw III, president and chief executive officer (CEO) of McGraw-Hill, which owns S&P, on a call with analysts.
However, Ken Vittor, the group’s general counsel, commented: “If there is a reasonable settlement opportunity, we are open to discussing it.” Vittor added that although the group believes the charges are without merit, the case is likely to drag on for three years or more.
The call was scheduled to coincide with McGraw-Hill’s fourth-quarter earnings report, but executives spent much of it refuting the government’s allegations. They also expressed confidence that S&P’s credit rating business would continue to grow despite the lawsuit, as low interest rates were encouraging more companies to issue bonds while demand for ratings is robust in emerging markets such as India.
A recent Gallup poll found that respondents identified the 'economy in general' as their biggest concern.
Sentiment in the financial services sector deteriorated in the three months to September, as firms digested the challenges of lower interest rates and the uncertainty caused by the vote to leave the European Union (EU), according to the latest CBI/PwC Financial Services Survey.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
The proposals of both US presidential candidates could shake up operating conditions in several sectors, reports the credit ratings agency.