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McGraw-Hill (NYSE: MHP) has fired the head of its credit ratings agency unit, Standard & Poor's. Kathleen Corbet was let go yesterday, replaced by MHP executive Deven Sharma.It may be an example of finding a convenient scapegoat. The company is probably not going to force out the parent's CEO Terry McGraw.
Outsiders would like to blame some of the subprime mess on ratings agencies like S&P. They argue that the firms should have downgraded the debt more quickly. Maybe, but it is hard to say that the tidal wave could be spotted. Predicting how many people will default from such a large pool may be very hard, if not impossible, to do.
According to The Wall Street Journal, half of McGraw-Hill's revenue comes from S&P.
It is hard to see how firing the credit ratings company's CEO accomplishes anything.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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