Friday, August 31, 2007

President of Standard & Poor’s Steps Down

Published: August 31, 2007
Kathleen Corbet, president of the credit rating company Standard & Poor’s, resigned after lawmakers and investors criticized the company for failing to judge the risks of securities backed by subprime mortgages.
The McGraw-Hill Companies, the parent of Standard & Poor’s, said in a statement yesterday that Ms. Corbet will be succeeded by Deven Sharma, executive vice president for investment services and global sales.
Ms. Corbet is leaving to spend more time with her family and her exit is not related to the current credit-market turmoil, a McGraw-Hill spokesman, Steven Weiss, said.
S.& P. and Moody’s Investors Service failed to downgrade bonds backed by loans to borrowers with poor credit until July, when some had already lost more than 50 cents on the dollar.
Christopher J. Dodd, the Senate Banking Committee chairman and a Connecticut Democrat who is seeking the presidential nomination, said yesterday that credit rating companies must explain why they assigned “AAA ratings to securities that never deserved them.”

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