Ratings agencies 'no longer trusted’

Ratings agencies are no longer trusted by the world’s largest investors, the former head of structured finance at Standard & Poor’s has warned.

David Jacob, who left the company last year, warned that policy makers have not done enough to reduce reliance on the agencies, whose ratings have been used to help determine the cost of money for governments and businesses for more than a century.

“They’re there because people have to have them, not because people believe in them,” Mr Jacob told Bloomberg. “Maybe retail investors do, that’s the unfortunate part, but I think institutional investors don’t.”

His comments are likely to increase calls for further regulation of a market dominated by S&P, Moody’s and Fitch.

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