Standard & Poor’s has appointed David Jacob as head of structured finance ratings. He replaces Vickie Tillman, who has been acting head since January, when Joanne Rose became executive managing director for risk and quality policy.
Jacob will have oversight responsibility for all of Standard & Poor’s structured finance operations and reports to Tillman, executive vice-president, ratings services. He has 25 years of experience in fixed-income investment analysis and the structured finance markets, including holding the roles of head of fixed-income research at JP Morgan and head of quantitative analytics at Morgan Stanley.
Most recently, Jacob was a principle with securitisation consulting firm Adelson & Jacob Consulting, which advised on securitisation, real estate and investments until the firm shut down on May 16. Jacob’s former colleague, Mark Adelson, was appointed chief credit officer at Standard & Poor’s in May.
“David will provide strong leadership and strategic direction to the structured finance business, and he will play an integral role in our ongoing efforts to improve transparency, build investor confidence, and continue to deliver high-quality, independent analytics,” said Tillman.
Jacob joins Standard & Poor’s as it is in the process of reviewing its methodologies after rating agencies received criticism over the transparency and reliability of their ratings during the credit crisis over the past year.
Standard & Poor’s has made several proposals for changes in its methodologies. These include distinguishing structured product ratings with a suffix - so that they would be rated AA.sf rather than simply AA, for example. It has also suggested including credit stability in its rating process, where the agency would award ratings based on its expectation of how far ratings would fall under a "moderate" stress such as a 1991-scale recession. For example, a AAA-rated security would be expected to fall no further than AA in one year of moderate stress and BBB in three years. However, the final decision over reforms of this policy has not yet been made.
“As the markets recover, we will play a leading role in helping restore confidence in the structured finance market,” said Jacob.
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