Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Standard & Poor’s president steps down after historic US downgrade

Deven Sharma’s resignation comes after the credit ratings agency downgraded US debt

Standard & Poor’s president Deven Sharma is set to leave the credit-rating firm at the end of the year.

The decision follows the credit rating agency’s controversial decision to downgraded US debt and S&P faces an inquiry by the Justice Department into its ratings of subprime mortgage securities.

Company sources said Sharma’s decision predated S&P’s historic downgrade of US debt earlier this month. The cut presaged a world wide rout on the stock markets as it threatened to increase the US’s cost of borrowing and caused outrage in Washington. Treasury secretary Tim Geithner said the agency’s decision showed “stunning lack of knowledge about basic US fiscal budget math,” and “they reached absolutely the wrong conclusion.”

Sharma, 55, is set to step down on September 12 and will be replaced by Douglas Peterson, 53, currently the chief operating officer of Citibank, the banking unit of Citigroup. Shareholders are currently pressing for a breakup of S&P’s parent company, McGraw-Hill. Sharma will remain with the company through the end of the year to help oversee McGraw-Hill’s review of its businesses.

“We are pleased to welcome Doug to the important role of president of Standard & Poor’s as it continues to build on the enhancements of recent years and accelerates global growth,” Harold McGraw III,

McGraw-Hill’s chief executive, said in a statement. “As we welcome Doug, I particularly want to thank Deven for his dedicated leadership of S&P.”

S&P downgraded US debt from AAA to AA+ earlier this month and issued a report that criticised US debt levels, said not enough was being done to cut costs and raise revenues and slammed the political infighting that accompanied the US’s decision to raise its debt ceiling. The move, a first since S&P began rating the credit-worthiness of railroad

bonds in 1860, came as rating rivals Moody’s and Fitch said they were maintaining the US’s triple-A rating but had put the US on watch.

The US attacked S&P after the downgrade, with a Treasury officials accusing the firm of making a tr error in its calculations. Last week the New York Times reported the Justice Department is investigating whether the S&P improperly rated dozens of mortgage securities in the years leading up to the financial crisis. The investigation reportedly started before the debt downgrade. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds