S&P president steps down after US ratings downgrade

[1]

Standard & Poor's president Deven Sharma is stepping down, its parent company announced Tuesday, just weeks after the credit rating agency cut the US sterling AAA rating and sent global markets into turmoil.

Sharma, who will take another role in the company before leaving altogether at the end of the year, will be replaced by Citibank's current chief operating officer Douglas Peterson.

The US Justice Department is currently investigating the company for its practices regarding mortgage securities.

Peterson, 53, will become the S&P president starting September 12, corporate parent McGraw-Hill said in a statement.

Sharma, 55, "will take on a special assignment working on the company's strategic portfolio review until the end of the year when he will leave the company to pursue other opportunities," the statement read.

Harold McGraw III, chairman, president and CEO of The McGraw-Hill Companies, described Peterson as "a seasoned executive with more than 25 years of global experience in financial services, risk management and capital markets."

Peterson's resume includes his role as the CEO of Citigroup Japan from 2004 to 2010, the statement read.

McGraw also thanked Sharma "for his dedicated leadership of S&P."

US officials lashed out at S&P after it docked the country's credit rating from AAA to AA+, accusing the agency of committing a $2 trillion math error and of using a faulty baseline. S&P has stood by its analysis.

S&P said the August 5 decision to downgrade the US long-term credit rating came as a result of divided US lawmakers failing to agree on a deal to reduce the ballooning US debt by some $4 trillion over 10 years.

The decision followed a bruising fight on Capitol Hill over raising the country's congressionally-set debt ceiling, which resulted in a limited agreement to cut some $2 trillion over that period.

The Justice Department probe, launched before the credit downgrade, is looking at whether S&P analysts wanted to lower the ratings of certain bonds backed by mortgage debt, but were prevented from doing so by superiors due to business concerns.