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S&P president resigns after US downgrade

Deven Sharma steps down from S&P following a "misguided" downgrade of the US credit rating.

Standard & Poor's president Deven Sharma has resigned following the agency's downgrade of the US credit rating.

On 12 September, Sharma will be replaced by Citibank's chief operating officer, Douglas Peterson.

Sharma, who has been S&P's president since 2007, will remain an advisor to S&P's parent company, McGraw-Hill, until the end of the year.

In an interview with NBC, US Treasury Secretary Timothy Geithner said that S&P's decision to lower the US government's credit rating displayed "terrible judgement".

S&P downgraded the US's high AAA rating based partly on debt forecast calculations which the Treasury has found to be inaccurate, due to a $2 trillion error.

There are also reports that the agency is under investigation by the US Department of Justice for awarding AAA ratings to complex mortgage that lost investors money during the housing boom.

It is unknown whether Sharma has decided to step down because of the Department of Justice investigation, or the credit rating downgrade.

S&P stated that they will "continue to produce ratings that are comparable, forward looking and transparent".

The company has said that Sharma began to look at other prospects last year, when the company was divided into two separate factions; the credit rating service and McGraw-Hill Financial.

McGraw-Hill will be selling on BusinessWeek magazine as well as its television stations and possibly its textbook division.

Two of the company's shareholders, the Ontario Teachers' Pension fund and Jana Partners hedge fund have called for S&P to be sold off.

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.