S&P

Standard & Poor’s decision to downgrade the public debt of the United States, on 5 August, 2011 sent shockwaves across the country. In a way, the historic event effectively ended the post World War II era, which was marked by US economic dominance.Standard & Poor's (S&P) is a US-based financial services company that publishes financial research and analysis on stocks and bonds. Well known for its stock-market indices— the US-based S&P 500, the Australian S&P/ASX 200 — the Canadian S&P/TSX, the Italian S&P/MIB and India's S&P CNX Nifty, the company also boasts of being one of the three credit-rating agencies, which also includes Moody's Investor Serviceand Fitch Ratings.[caption id="attachment_57568" align="alignleft" width="380" caption="Picture by Reuters"][/caption]The company traces its history back to 1860, with the publication of the book History of Railroads and Canals in the United States by Henry Varnum Poor, in an attempt to compile comprehensive information about the financial and operational state of US railroad companies.S&P is one of the several credit-rating agencies (CRAs) that have been designated a nationally recognised statistical rating organisation by the US Securities and Exchange Commission. The company essentially issues both short-term and long-term credit ratings, on a scale from AAA to D, for the debt of public and private corporations.

Showcasing the new realities in global capital markets, the company that has been in news for quite sometime now, has overcome the allegations of the world that was reflected in The Globalist as, “in the past, ratings often were little more than designer items, paid for by the debt issuer in order to convince the debt market of the virtues of one's own issues. In other words, they were not to be trusted.”

The S&P President Deven Sharma, with the decision, finally cleared the air of being biased over the fiscal vices encountered on the home front.Spreading the message that the rating agencies are, “back to their original mission — which is to serve buyers, not sellers” S&P succeeded in creating a historical event.