Deven Sharma is stepping down as president of Standard & Poor’s only weeks after the rating agency issued an unprecedented downgrade of the credit of the United States, according to people familiar with the matter.

Mr Sharma will remain as an adviser to S&P’s owner, McGraw-Hill, for four months and leave the company at the end of the year, they said. Mr Sharma will be replaced as S&P president by Douglas Peterson, chief operating officer of Citibank, the banking unit of Citigroup, they said.

The downgrade of US credit on August 5 led to the worst single day fall in US equity prices since the depths of the financial crisis, and triggered weeks of global market volatility.

People familiar with the matter said Mr Sharma’s departure was unrelated to the downgrade, or reports that S&P is being investigated by the Justice Department in connection with its ratings of dozens of mortgage securities in the years leading up to the financial crisis.

The McGraw-Hill board made the decision to replace Mr Sharma at a meeting on Monday, where it also discussed an ongoing strategic review.

Sources close to the company said the search for Mr Sharma’s replacement has been going on for six months, and was triggered by the split of its data, pricing and analytics business from its ratings business. The creation of that new group, McGraw-Hill Financial, reduced the scope of Mr Sharma’s oversight, they said.

S&P has been subject to intense criticism following its decision to downgrade the rating on US sovereign debt to double A plus from triple A. This came after an agreement to raise the US debt limit fell short of the $4,000bn worth of deficit reduction measures that S&P suggested would be necessary to avert a downgrade.

Obama administration officials attacked the ratings agency for an “error” in its methodology that meant it initially forecast a debt:GDP ratio of 93 per cent by 2021 rather than the 85 per cent that was projected in its final downgrade report. S&P quickly agreed with US Treasury officials that its analysis was based on different baseline scenarios but disagreed with the “error” characterisation.

“I think S&P has shown really terrible judgement and they’ve handled themselves poorly, and they have shown a stunning lack of knowledge about basic US fiscal budget math, and I think they came to exactly the wrong conclusion,” the US Treasury secretary, Tim Geithner, told MSNBC.

Company officials hope that Mr Peterson’s appointment will help repair relations with Washington. Mr Peterson is known in the financial community as a seasoned banker with solid operating experience.

McGraw-Hill is also under pressure from activist investors seeking a break-up of the company and has acknowledged it has begun a strategic review of its entire portfolio.

“Everything is being scrutinised [and] we expect to continue this process with a number of significant actions in the second half of this year,” Terry McGraw, chairman and chief executive, told analysts last week.

Mr Sharma joined S&P in 2006 as an executive vice-president and was appointed president in 2007. For the previous five years, he had worked for the McGraw-Hill Companies, S&P’s parent company. He previously worked at the management consulting firm Booz Allen Hamilton.

Under his leadership, S&P, along with other major credit rating agencies, has come under attack for its analysis of structured products such as collateralised debt obligations (CDOs) linked to sub-prime mortgages. The Dodd-Frank Act, a landmark piece of financial regulation passed just over a year ago, made proposals to diminish the influential role of credit ratings in financial markets.

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