The Indian behind U.S. downgrade

Emerging from the coal city of Dhanbad in Jharkhand, it's that rich experience and in-depth industry knowledge that took Deven Sharma to the chair of the President of Standard & Poor's. The man, who has never been a popular figure in the world media until S&P downgraded the U.S. credit rating from 'AAA' to 'AA+', is now one of the most searched names on the internet and his action is a hot topic on the web. The downgrading and the following economic developments across the globe are making headlines everywhere and people are desperately trying to make some sense of the global economics and the credit crisis.

Born in 1956, Devan Sharma did his schooling from Dhanbad and then received his Bachelor's Degree from Birla Institute of Technology, Ranchi. Then he moved to the United States to acquire a Master's Degree from University of Wisconsin-Milwaukee and then a Doctoral Degree in Business Management from Ohio State University.
The spotlight was turned on Sharma when his team of professionals decided to downgrade the prestigious top rating AAA+ that is regarded as the Gold standard in the world of finance, which the nation enjoyed since 1914. The possibility of downgrading was on air for some time and finally it was out to the public officially on August 5, a decision welcomed by severe criticism from many, especially from the U.S. Treasury officials.

The downgrading came as a shock to investors across the world as it caused some major market downturn and it sent jitters to many governments who held emergency meetings to map out plans to cope with any adverse impacts.

Reaffirming the fact that the rating cut was in the best interest of investors, in an interview with The Wall Street Journal, he said "Our ratings are forward-looking. And part of making ratings forward-looking is for the benefit of investors, to give them a view about how we see the future risks of the credit unfolding."

Answering a question during the WSJ interview on the push back he received from U.S. government officials over the downgrade, he said "There are seldom occasions when people say 'we recognize.' We are supposed to be objective, and others are always trying to convince us why the risk is less than we think it is. And our job is to tell the investor: this is where we think the risk is. Even countries where we have upgraded, they think we are being unfair. They think we should upgrade them even more."

Devan Sharma has been a part of Standard & Poor's since 2006 as Executive Vice-President and was promoted to president a year later. Before joining the S&P, he worked as an Executive Vice-President at The McGraw-Hill Companies, S&P's parent company, for five years.

S&P under Sharma had been under scrutiny for its 2008 sub-prime and market crisis along with some other top rating agencies. In a settlement agreement with the New York Attorney General, the rating agencies later agreed to mend their rating policies. In a letter published in the WSJ in 2009, Sharma clarified, "We have made significant efforts to strengthen our independence and quality, and combined with the Security and Exchange Commission's regulatory oversight. we will continue to strive for the highest standards of independence, transparency and analytical quality."

His initial days of employment were with Dresser Industries and Anderson Strathclyde before he joined Booz, Allen & Hamilton, in 1988. After working with Booz for 14 years, he moved to The McGraw-Hill in 2002. He has also been the Director of CRISIL from July 22, 2005 to July 2008.