NEW YORK, March 11 (Reuters) - Rating agency Standard & Poor’s has hired two more people to its global risk management team, part of the company’s continuing efforts to improve the quality of its ratings after the financial crisis.
Demetrios Lefakis is now the company’s chief quality officer and Michael Walloga is managing director of model validation, according to a note signed by Chief Risk Officer Don Howard. Both have already taken up their positions.
The model validation position is new.
Lefakis will oversee the way S&P uses methodologies, processes, criteria and policies. He will also help make sure that the company’s ratings reflect changing market trends and risks, the note said.
Walloga will be responsible for the rating agency’s model validation globally and identifying and managing model risk.
The major rating agencies were harshly criticized after the mortgage meltdown for their ratings of complex housing-related securities, with lawmakers pointing the finger at inflated ratings as one cause for the crisis.
More recently, the U.S. government filed suit against S&P, saying it committed fraud in its pursuit of lucrative market share during the run-up to the crisis.
But legal experts say the government’s case may have significant flaws.