Last Thursday, S&P caused a shock in the bond markets when it informed some of the subscribers that it had downgraded the credit rating of France.
An hour and a half after the original message was sent out, S&P sent out a clarification that the message resulted from a technical error and not from any action it intended to take against France.
French policy makers were understandably enraged and called for an investigation of the mistake.
At a time where the Eurozone was already getting very jittery over the problems of Greece and more recently Italy, this was the last thing that the markets needed. A downgrade of France’s AAA credit rating would affect the rating of the European Financial Stability Facility (EFSF), the bailout fund for struggling euro member countries.
Earlier in the year, S&P had downgraded the credit rating of the United States from AAA to AA+. This was followed by the resignation of its president Deven Sharma a few weeks after the downgrade.