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MF Global spoke of ‘strong’ finances
Tuesday 31 January 2012 – by Andrew Hickley 
In a letter to the US House Financial Services subcommittee on Oversight and Investigations, S&P; said that CFO Henri Steenkamp had sent the rating agency an email on 24 October saying that “MF Global’s capital and liquidity has never been stronger”, Bloomberg reports. The firm filed for chapter 11 bankruptcy on 31 October. Moody’s had downgraded the broker to a Baa3 rating – one above junk status – on 24 October, partly due to its large exposure to European sovereign debt. By 27 October it lowered the firm’s rating another two notches to Ba2. A memorandum before the meeting, sent to committee members on Friday, questioned why the rating agencies had left it so long to downgrade the firm when it had posted details about its large EU sovereign debt exposures as early as May 2011. “By way of contrast, the Financial Industry Regulatory Authority immediately identified MF Global’s exposure to European sovereign debt as a concern during a routine review of MF Global’s audited financial statements that were filed with Finra on May 31, 2011,” the document says. However, the firm’s collapse “cannot be said” to have resulted from the rating downgrades, it added.
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STRAW POLL
Will markets in 2012 have a tougher time than 2011?
