Boss at JPMorgan's hedging unit quits after huge trading losses
The leader of JPMorgan Chase & Co's hedging unit, Ina Drew, is retiring, the bank said yesterday, marking the first casualty from stunning trading losses that experts say could reach more than $3bn (€2.3bn).
The White House seized on the bank's problems yesterday to renew calls for tighter regulation on big banks, and confirmed that the US Securities and Exchange Commission was investigating the losses.
JPMorgan said chief investment officer Ms Drew, who was among the highest-paid executives at the bank, had decided to "retire from the firm".
She will be succeeded by Matt Zames, a trader by background who is well versed in risky financial bets. He was at one time employed at Long-Term Capital Management, a hedge fund whose 1998 collapse nearly caused a global crisis.
CEO Jamie Dimon's position as a director on the Federal Reserve Bank of New York's board renewed concern that the central bank is too close to the institutions it oversees.
Dimon is one of three bankers sitting on the New York Fed's board, as mandated by Congress under the Federal Reserve Act.
While directors have no role in bank supervision, Elizabeth Warren, a Massachusetts Democrat running for US Senate, called for Dimon's removal from the district bank board because the New York Fed regulates JPMorgan.
Senator Bernard Sanders, a Vermont Independent, said he sees a conflict in Dimon's two roles.
The biggest US bank by assets also said yesterday that Mike Cavanagh, CEO of the Treasury & Securities Services group, would lead a team of executives overseeing its response to the losses. The bank's statement made no mention of two subordinates of Ms Drew (55) who were involved with the trades -- London-based Achilles Macris (50) and Javier Martin-Artajo -- who sources had said were expected to leave.
The departure of Ms Drew after 30 years at JPMorgan comes after the unit she ran, the chief investment office, mismanaged a portfolio of derivatives tied to the creditworthiness of bonds, according to bank executives.
Shares of JPMorgan were down 2.3pc to $36.11 in afternoon trading on the New York Stock Exchange. (Reuters)