S&P President Stepping Down Following U.S. Credit Downgrade

This article is from the archive of our partner .

Deven Sharma, president of Standard & Poor's, is stepping down from his position in the company, according to a report from the Financial Times. Sharma will stay with S&P for another four months as an advisor before leaving the company at the end of the year. His resignation comes only 17 days since the S&P downgraded the United States' credit rating from AAA to AA+. His resignation was accepted during a board meeting on Monday, says the FT, and is unrelated to the fallout from the S&P's downgrade, or news that the Justice Department is now investigating S&P. The hunt for Sharma's replacement has been going on for six months, and was spurred after a split in the company limited Sharma's responsibilities: 

People close to the company said the search for Mr Sharma’s replacement has been going on for six months, and was triggered by the split of its data, pricing and analytics business from its ratings business. The creation of that new group, McGraw-Hill Financial, reduced the scope of Mr Sharma’s oversight, they said.

Just days after the downgrade, Sharma told the Wall Street Journal his goals with S&P were, "Staying focused and continuing to drive the organization are my goals." On what the downgrade meant for S&P's reputation, he sounded defiant when he said: 

A: It should reinforce to investors and the marketplace broadly that we make the calls on the credit risk as we see it, to the benefit of investors. It's the same statement I've made in Europe. Europe has been very critical of us when we've [downgraded countries there]. We have always said in the European marketplace: 'Look our role is to call the risk when we see it.' And I think by calling the risks we bring transparency and that enables market participants to work better.

FT points out the news comes as S&P are performing a top-to-bottom strategic review of its operations. "Everything is being scrutinised [and] we expect to continue this process with a number of significant actions in the second half of this year," said S&P's chairman and top executive, Terry McGraw, to analysts according to the Times. Sharma is being replaced by Citibank's current chief operating officer, Douglas Peterson. 

This article is from the archive of our partner The Wire.