Japan hits out at S&P over 'significant' ratings problems The country's financial regulator criticised one of the world's two largest rating agencies for errors in setting and publishing ratings on complex financial derivatives. "Significant problems were identified with the company's business operations from the perspective of the public interest and investor protection," the Financial Services Agency said on Friday. Credit rating agencies were lambasted for their role in deepening the financial crisis, when mortgage-backed debt they had awarded top ratings to rapidly lost value as US house prices fell. In a ruling in Australia last month, a judge found S&P liable for assigning misleading ratings to debt acquired by local governments in the run-up to the financial collapse. Since the crisis, tensions with governments, particularly in the Eurozone, have flared as countries struggle with large amounts of debt and battle to safeguard their ratings. Yesterday's report by the Japanese regulator found that the agency had failed to take account of events that could affect the underlying value of the assets in the derivative products it was rating. The regulator ordered S&P to submit a report 15 days before the end of each quarter. S&P said that it takes "this matter very seriously and sincerely apologize to clients and market participants." S&P was criticised by the US government when it stripped the country of its top credit rating last year, but the company robustly defended its decision. This week, Chancellor George Osborne played down the importance of Britain preserving its AAA rating after S&P became the latest agency to signal it is prepared to cut the rating. S&P, Moody's and Fitch continue to dominate the market for credit ratings.