mr. sharma, i would start off with you. >> thank you, mr. chairman. in the spirit of objective of transparency and clarity we have recently also clarified how we're going to rate banks in the future. we start with looking at the standalone credit risk assessment of a bank on a number of factors, that includes business position to risk exposure, funding and liquidity. but then we do, after we do the standalone risk assessment we do look at what external support it may be provided by holding company or by a parent institution or by government support. and in that context we have created a very simple framework that looks out different governments based on their policies and regulations and history as to whether they are supportive or supportive uncertain or interventionist. and we look at different institutions as to how important they are for the economy. the size, the concentration, the interconnection across the different market participants. and based on that we have determined how much support we believe the government may provide to these institut

mr. sharma? >> a breaking member, we have always had one consistent skill we have tried to adopt across all of our asset classes, and as a result, our municipal ratings are generally higher than the corporates, of course, and other types of institutions. -- ranking member, we have always had one consistent strategy. it is copper ability across all asset classes. >> the reason i ask is because in 2008, again, not updated, and i know it has changed a little bit, but my guess is, let me ask you a basic question. are you aware of movies defaulting at a higher rate than corporate bonds? >> i do not have that exactly. as i mentioned, we are aiming to give comparable with the in ratings across all asset classes. >> that would mean you would now star rating what was once waited in 2008 as a beat -- once rated in 200 a bba to something else, and i would argue that since default rates are the only thing that matters in a final analysis, again, because the only thing that matters is the likelihood of gettin

mr. sharma, do you believe the amount of debts held by the united states poses a systemic risk? >> the growth rate of the debt burden is something that needs to be addressed for us to continue to assess the credit worthiness of the sovereign debt. >> in the political record we are seeing today, do you think is the job of the credit agencies to get involved in trying to make a decision one way or another on a political basis? do you think that is interference on the part of the credit rating agencies to be stepping in at this stage and making an assessment? >> sovereign debt is a large asset class that a large investors around the world and back in. our role is to provide an independent view and a full were looking you bang for investors as to what the risk levels -- forward-looking view for investors as to what the risk levels are. do we believe the risks are rising for any sovereign? we are doing the same thing we do in any other part of the world. we are speaking to the risks investors invest in. this is a large asset class that investors invest in. >> do you honestly believe

mr sharma. >> thank you, members of the subcommittee. good morning. my name is deven sharma and i am president of standard and poor's and served in that capacity since 2007. i am pleased to appear before you today. much has changed with regard to credit rating agencies over the past several years. both in terms of how we go about the work and the regulatory framework in which we operate. for our part we at standard and poor's have undertaken a variety of initiatives in recent years designed to further our fundamental mission of providing high-quality independent benchmarks about credit worthiness of debt security. these initiatives include measures to strengthen governance and control framework and have the analytics and criteria for you to raise issues and issuers and clearly communicate the rationale behind the actions and better identify key areas of risk to further transparency in the market. these initiatives reflect significant efforts we have made to enhance the way we go about serving investors, regulators and capital markets. put simply added