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When the value of the investments turned out to be worth less than thought, the agencies downgraded their ratings, spreading panic among investors and leading the U.S. government to conclude the crisis couldn't have happened without the rating agencies. In its lawsuit against S&P, the government is demanding $5 billion in penalties and alleges that it gave high marks to the investments because it wanted to win more business from the banks that sold them. The dominance of the Big Three has also raised concerns in Europe. Britain's House of Lords said in a 2011 report that they accounted for more than 90 percent of the market. Earlier this month, Dagong became the 34th rating agency approved to operate in the European Union by regulators, who have been seeking to expand competition. Dagong was denied permission to operate in the United States in 2010 amid a dispute over Beijing's reluctance to share information with American accounting regulators.
[Associated
Press;
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