Was he just doing his job, or was he leading a flawed rating process? As the move that invited the US Treasury's wrath, the rating agency Standard & Poor (S&P) invited a storm of controversy by downgrading the US long-term sovereign credit rating from the top-notch 'AAA' level for the first time since a rating was assigned to the world's largest economy. The resignation of Deven Sharma as the President of S&P soon after shocked and surprised many of his associates. The Indian-American was thrust into the international spotlight when S&P made its unprecedented decision to downgrade the US. The decision by Sharma to resign comes from the fact that the ratings agency was under pressure from several fronts, including an inquiry by the Justice Department into its ratings of subprime mortgage securities and a push by activist investors to break up its parent company, McGraw-Hill.
The methodology used by S&P has come under criticism from President Barack Obama and his government, and the fact that other rating agencies have not downgraded the US has strengthened their argument. However, many critics of that argument believe that the country's precarious inability to politically agree on a long-term solution was resÂponsible for the economic impact-not the rating downgrade.
Sharma led from the front and defended S&P's move when the US administration hit hard against the ratings agency, terming its analysis flawed and questioning its credibility and integrity. The decision resulted in the worst drop in the US stocks as well as volatility that continues to whipsaw the markets weeks later.
Sharma, originally from Jharkhand, India, worked with S&P's parent company McGraw-Hill since 2002. Citibank Chief Operating Officer Douglas Peterson has replaced Sharma.