Standard & Poor's boss goes

The head of the agency that stripped the US of its top-notch credit rating earlier this month is to step down in September.

Standard & Poor's president Deven Sharma will be replaced by Citibank's chief operating officer Douglas Peterson next month, the agency's parent, McGraw-Hill, said. Sharma, who has been in the role since 2007, will leave McGraw-Hill at the end of the year.

The move comes after S&P analysts decided that US debt was no longer worthy of the highest "AAA" rating, although S&P said the two events were not connected.

Recent weeks have also seen revelations regarding an investigation by the US Justice Department into the agency's ratings of complex mortgage securities that quickly turned sour during the credit crunch.

For its part, S&P said it has "received several requests from different Government agencies regarding US mortgage-related securities", and that it continued to co-operate with the requests.

The downgrade of US debt to "AA+" was criticised by the Obama administration. Officials claimed that the agency had gone ahead with the move despite admitting to a US$2 trillion ($2.4 trillion) "error" in an early version of its decision.

The downgrade, which came after a rancorous political battle to raise the US debt ceiling, triggered stock market falls.

However, it was not matched by the other large ratings agencies Fitch and Moody's.

Moreover, in a sign that investors still view the country's debt as a safe haven, US Treasuries have attracted interest throughout the recent market turmoil, with yields falling to record lows.

Peterson will take over on September 12, with McGraw-Hill, which has come under pressure from shareholders to restructure, saying that Sharma will stay on until the end of the year to work on a strategic review. Shareholders in S&P's parent have been calling for a break-up of the group, which also owns the textbook publisher McGraw-Hill Education.

In a Securities and Exchange Commission filing this week, the hedge fund Jana Partners and the Ontario Teachers Pension Fund, which together own 5.6 per cent of McGraw-Hill, also called on the company to "bolster" the ratings service with an "independent oversight figure".

- Independent