Finance

Home page

Finance

S&P Agency: US needs near 18 years for recovery of rating

08 August 2011 09:43 (UTC +04:00)

Baku â€“ APA-Economics. Standard and Poor’s managing director John Chambers defended his agency’s controversial decision to downgrade the credit rating of the United States from AAA, saying "it could take awhile" for the U.S. to recover its higher rating because of "political gridlock" in Washington, ABC News reported.

"We’ve been saying for some time that the fiscal trajectory of the United States was on a bad path," Chambers said in an interview with "This Week" anchor Christiane Amanpour.

Chambers, who serves as chairman of Standard & Poor’s sovereign ratings committee, said it may be years before the U.S. recovers its AAA rating, citing examples of countries that took nine to 18 years to get their ratings upgraded after having their credit-worthiness lowered.

"If history is our guide, it could take awhile," Chambers said. "The political gridlock in Washington leads us to conclude that policymakers don’t have the ability to put the public finances of the U.S. on a sustainable footing."

On Friday, S&P lowered the United States rating on long-term U.S. debt from a pristine AAA rating to a tier lower, AA+. This is the first time in 70 years that U.S. Treasury debt has not been AAA.

Soon after the downgrade was announced, controversy arose after reports showed that S&P overstated the U.S. debt by $2 trillion.