S&P fears investor backlash from US reform bill: report

5th July 2010, Comments 0 comments

The head of US ratings agency Standard and Poor's said on Monday he feared investors could use new US financial market rules to blame the agency for their own bad business decisions.

"There is a trend by investors towards the judicial path, to blame ratings agencies," Deven Sharma said in an interview with German business daily Handelsblatt.

"Recently adopted financial market reforms could lead even more investors to try to deflect attention from bad decisions," Sharma added.

"We fear a certain amount of abuse there."

Last week, the US House of Representatives adopted a financial markets reform bill which sets up control mechanisms and grants investors the right to more information on financial products.

It is aimed at preventing a repetition of the global financial market crisis.

Sharma acknowledged meanwhile that ratings agencies "completely missed" risks in their assessment of high-risk US home mortgages, which helped spawn the sup-prime crisis in the United States.

© 2010 AFP

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