S&P Chief Stepping Down
Recently, State Impact reported on how the S&P downgrade and other economic convulsions have affected, or could affect, the New Hampshire economy. And speaking of S&P, the Associated Press reports:
“The president of Standard & Poor’s [Deven Sharma] is stepping down, an announcement coming only weeks after the rating agency’s unprecedented move to strip the United States of its AAA credit rating.”
Alex Wong / Getty Images
Deven Sharma has headed S&P since the start of the economic crisis in 2007.
Sharma’s been at S&P since 2006, and has headed the agency since 2007. As for why he’s leaving…? McGraw-Hill Cos., which is the parent company to S&P, made a statement late yesterday saying Sharma “was ready for new challenges.” There were, however, some pretty big omissions,
“McGraw-Hill’s statement did not mention the Aug. 5 downgrade that sent shock waves through global financial markets and was sharply criticized by the Obama administration, which said the agency’s analysis was fundamentally flawed. Other major rating agencies have maintained their AAA ratings on the United States.
It also did not refer to recent reports that the Justice Department was investigating whether S&P improperly rated dozens of mortgage securities in the years leading up to the financial crisis in 2008.”
A Bloomberg News piece published by the San Francisco Chronicle notes that Sharma took over the ratings agency a month after it started back-peddling on its high ratings for mortgage-backed securities. Apparently Sharma did a decent job of increasing revenue–S&P’s coffers reportedly grew by 10.4 percent just over the last year. But, as the Bloomberg piece quotes one industry insider,
“‘Since Sharma came in, he has done little to enhance the credibility or reputation of the ratings agency,’ Joshua Rosner, an analyst at the New York-based research firm Graham Fisher & Co., said by phone. ‘Given the recent downgrades, it appears their operational management and ratings modeling have not been meaningfully strengthened.'”
Another source put it more bluntly,
Toshifumi Kitamura
Douglas Peterson of Citibank is set to take over S&P in mid-September.
“‘It looks like he’s being helped out the door,’ Noel Hebert, a credit strategist at Mitsubishi UFJ Securities USA Inc. in New York, said in a phone interview. ‘If it was a planned retirement, it should have been handled in a different way.'”
