S&P Chief Resigns as B&C Criticism Mounts

The McGraw-Hill Cos. replaced the head of its Standard & Poor's unit on Thursday as criticism continued to mount that S&P (and other rating agencies) did not closely scrutinize the underlying subprime loans in the bonds it rated.Leaving S&P as its president is Kathleen Corbet. She will be replaced by Deven Sharma. A spokesman for McGraw-Hill denied that Ms. Corbet's departure is tied to criticism faced by S&P on its subprime MBS ratings. (When mortgage lenders securitize subprime loans, they pay the rating agencies to review and grade the bonds.) One mortgage insurance executive told MortgageWire that the rating agencies "have a lot to explain for their role in the subprime crisis." He added: "If you were a rating agency and wanted the business of a certain subprime lender, would you give them a bad grade?" S&P can be found online at http://www.standardandpoors.com.