S&P president resigns

Kathleen Corbet, the president of rating agency Standard & Poor’s, has resigned. The institution has come under heavy criticism for its role in assigning AAA ratings to securities with sub-prime exposure.

Kathleen Corbet has resigned as president of rating agency Standard & Poor’s, seemingly the latest victim of the sub prime crisis.

Deven Sharma will take over Corbet’s position with immediate effect. Sharma has served as executive vice president of Investment Services and Global Sales for Standard & Poor’s since November 1, 2006.

The rating agency said in a statement that Corbet is stepping down from her position “to pursue other opportunities”. 

The agency and rivals Moody’s and Fitch have been much criticised for their failure to downgrade securities backed by sub-prime mortgages until July, leading to extensive losses for numerous investors and accentuating the current problems in the debt markets.

According to media reports, Christopher Dodd, chairman of the US Senate Banking Committee, asked the rating agencies to explain why they had assigned AAA ratings “to securities that never deserved them”.

The sub-prime crisis has led to a knock-on effect in the leveraged buyout debt markets, as many of the investment vehicles with sub-prime exposure were also key investors in syndicated debt.

The heads of structured finance at Barclays Capital and HSBC have also recently resigned from their positions following the problems in the debt markets.