Standard & Poor's announced yesterday that its president Deven Sharma is stepping down. The ratings agency has come under fire in recent weeks for its downgrade of the United States, and it has seen its stock tumble amid reports that the Justice Department is investigating it and other agencies' ratings of mortgage securities.
We spoke with Deven Sharma about these securities back in 2009 for our This American Life show, "The Watchmen."
Some of our mortgage-related securities experienced more severe downgrades than we have historically experienced, and that's been a disappointment.
I think, honestly, as a listener out there, this is the thing that is frustrating is that I've heard this a lot, that nobody could have seen this coming, nobody could have seen this coming. More than anybody else, that is your job. Right? It's the investment bank's jobs to say, this is going to be great. It's your job to say, you know what? Here's how things could go bad.
Our analysts are really smart people, and they too observed that there was too much of a bubble and we needed to do something about it. And they made changes to our methodology and criteria starting in 2006. Now, hindsight, it's like they didn't make enough of a severe change as we have now experienced. But it's not that they missed it. They missed the severity of it.
Sharma has been president of the ratings agency since 2007.