(June 3, 2014) – Credit rating agency Standard & Poor’s (S&P) has been censured by the main European financial regulator for falsely alerting subscribers that France’s credit rating had been downgraded.
The European Securities and Markets Authority (ESMA) investigated an email alert sent out by S&P in November 2011 stating: “France (Republic of) (Unsolicited Ratings): DOWNGRADE.”
Although the mishap occurred at the height of the European debt crisis, France’s credit rating in fact had not been downgraded. The country is currently rated AA with a stable outlook.
ESMA said in the notice published today that the publication was down to a series of failures by S&P “relating to sound internal control mechanisms, effective control, and safeguard arrangements for information processing systems and decision-making procedures and organisational structures”.
The error occurred due to a problem with S&P’s Global Credit Portal database, which erroneously sent out the email automatically when the agency attempted to correct an issue with its rating of France’s banking system.
S&P has not been fined for the breach of credit rating agency regulations, and ESMA did not find any evidence of intent or negligence by the group.
In a statement S&P said it had publicly acknowledged the error at the time, and emphasized that it was “unrelated to our ratings or ratings analysis”.
“We have since enhanced our systems to safeguard against such an incident in the future,” the statement said.