(CNN) - In a first for a U.S. credit ratings agency, Standard & Poor's has received official notice from Washington that it will face a civil lawsuit over imprecise ratings - now criticized as being too high by analysts, U.S. lawmakers and even S&P itself - of mortgage-backed investments that eventually contributed to the 2008 financial crisis.
Many of those investments received AAA ratings, a grade which implies highest safety and least risk, but imploded as the U.S. housing bubble burst.
As S&P awaits further word from the U.S. Department of Justice, ratings agencies Moody's and Fitch will be watching to see if they are next.
Ten months into his eight-year term, the man hailed as ‘’Super Mario’’ is facing his biggest test yet.
And though the outcome of the European Central Bank’s latest meeting is by no means a given, what’s sure is his words will resonate far from the region’s shores.
Now into its third year and counting, the single currency’s funding crunch has claimed the scalps of three eurozone countries so far and threatens to engulf others which are ‘too big to bail’ but too big to fail.
What started as a financial crisis has morphed into an existential one and left ECB President Mario Draghi to fill the vacuum of leadership left by the eurozone’s squabbling politicians.
While the ECB will formally be contemplating its interest rate policy on Thursday, Draghi’s most pressing task will be far less mundane: instead investors are relying on him to keep the next troubled members solvent, even if that means creating an artificial market for their debt.
London (CNN) – From the budget, to economic benefits, to the legacy: No-one is talking about the Paralympics’ bottom line.
Perhaps it’s because Team GB and the London 2012 organization were so impressive, leaving the country revelling in the medal haul rather than totting up the bill.
The nation has gone sports-mad, now embracing the lesser-known (but I’ll bet just as exciting to watch), paralympic sports, from Murderball (think of it as wheelchair rugby) to Boccia (like bowls, but for athletes whose disabilities impact on their motor skills).
But - despite all this goodwill - the UK economy is refusing to play ball.
London (CNN) – Italian Prime Minister Mario Monti has lit a fuse that has sparked outrage in Germany and exposed the frayed wires that are holding Europe together.
In an interview with Germany’s Der Spiegel, Monti was quoted as saying: "The tensions that have accompanied the eurozone in the past years are already showing signs of a psychological dissolution of Europe."
He added that governments have to "educate" their parliaments as they try to reach agreement on the eurozone's future.
"If governments allow themselves to be entirely bound to the decisions of their parliament, without protecting their own freedom to act, a break up of Europe would be a more probable outcome than deeper integration."
(CNN) – There was lively debate among Business 360 readers on question posed by Friday’s post China slowdown bigger worry than eurozone?
The heart of Friday’s post was the conversation CNN’s Richard Quest had with Jim O’Neill, chairman of asset management for Goldman Sachs, that the slowdown of developing economies such as China was more worrisome than the eurozone crisis.
Many of the dozens of comments from Business 360 readers can be summed up in two words: What slowdown?
Jon B: “I'm an American and I've been living in China for 5 years. Yes, businesses are hurting and prices are rising, but China's people are only getting richer. Their economy is doing just fine for right now. Maybe within the next five to 10 years China will resemble the U.S. and its current struggle, but for now they are full steam ahead. There aren't many icebergs big enough to cripple this boat just yet.”
Hong Kong (CNN) – Will China’s economy have a hard landing, soft touchdown or slow ascension?
The lack of strong action Thursday from the European Central Bank on Europe’s spiraling debt crisis – coupled with similar inaction from the U.S. Federal Reserve on the slowing U.S. economy earlier this week – has ratcheted global investor stress on how China will handle its own slowdown.
The question percolated throughout interviews on CNN International business shows this week.
“It is quite disturbing that Brazil and India have slowed down so much, obviously there’s this huge debate going on about China’s slowdown,” Jim O’Neill, chairman of asset management for Goldman Sachs, told Richard Quest when he argued the slowdown in developing behemoths like China and the rest of the BRIC bloc is more worrisome than the eurozone crisis.
Investor Mark Mobius, head of Templeton Emerging Markets Group, disagreed.
"A lot of people ask me if China is going to have a hard or soft landing," Mobius said. "And I say they are not landing. They're continuing to grow and they're growing at a pretty fast pace."
Still, the signs of a China slowdown are many. Inventories in factories are piling up, and companies ranging from electronics, airlines and sportswear have issued profit warnings.
“While the world fixates on what the Fed and the ECB have up their collective sleeves to stem the sovereign debt contagion and to spur growth, it appears to me that the policy prescriptions might need to include China,” wrote Mike Paulenoff of MPTrader.com. “As in, how to avert a hard landing?”
So, hard days ahead for China? Will its economy touch down gently, or is it likely to trampoline – with help from Beijing – like it did in the wake of the 2008-2009 financial crisis?
Have your say. Leave a comment below.
London (CNN) – The British economy is shrinking far faster than expected. The latest figures - showing a 0.7% contraction - are a huge shock.
The rotten weather, extra days off for the Diamond Jubilee and contagion from the eurozone crisis have contributed: Now even UK Chancellor George Osborne is conceding the country has “deep-rooted economic problems.”
Jeremy Cook, chief economist at foreign exchange company World First, points to the eurozone’s hoovering up of government cash as one issue. Government spending is meant to be dropping but is instead increasing, he says. “We’ve said the situation would get worse before it gets better, anything worse than this and we are risking depression,” he warns.
Oh dear, what a gloomy picture. But at least London is hosting the Olympics, right? British Prime Minister David Cameron has declared the games in London will bring great spoils: Around $20 billion, we’re told. Banks, restaurants and retail outlets have staffed up, helping nudge unemployment to a nine-month low.
London (CNN) – Flicking through Barclays’ 286-page annual report, it’s impossible to avoid a grinning former CEO Bob Diamond – once branded "the unacceptable face of banking" - making a range of pronouncements, which in the wake of the Libor rate fixing scandal now sound profoundly hollow.
Take this old chestnut from Diamond, much touted since banks were caught on the back foot during the 2008 credit crunch: "Banks need to become better citizens."
Or listen to this snippet: "When we’re at our best, we serve the real economy by doing our best for all our stakeholders: our customers and clients, the communities we serve, our people and our shareholders."
London (CNN) - Fresh from the frying pan and about to leap into the fire, former Barclays boss Bob Diamond faces a UK parliamentary committee today to answer questions on a rate fixing scandal that cost his bank $450 million and Diamond his job.
Diamond resigned yesterday - alongside COO Jerry del Messier – saying “the external pressure placed on Barclays has reached a level that risks damaging the franchise.”
A memo published by Diamond ahead of his testimony today appears to point the finger at senior central bankers and politicians, suggesting Barclays was encouraged to lower the rate known colloquially as ‘LIBOR.’
David Ruffley, a Conservative member of parliament for Bury St Edmunds, is one of 13 lawmakers from a cross-party panel which will grill Diamond later today.
World Business Today spoke to Ruffley about the questions lawmakers want answers to. FULL POST
London (CNN) – Eurobonds will be back on the agenda at the euro crisis summit later this week, with one source telling me there will be “more than twenty different types” under discussion.
Such bonds - a way to raise cash backed by all 17 eurozone countries – have long been floated as one panacea to the bloc's financial crisis but the idea has been stymied by political resistance, largely from German chancellor Angela Merkel.
But as the crisis continues to rumble on the introduction of eurobonds looks increasingly likely. And the ascendancy of eurobond advocate Francois Hollande, France’s new president, has thrown weight behind the idea.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.