JPMorgan investment chief resigns after $2 bn loss

JPMorgan Chase's chief investment officer Ina Drew resigned Monday as the White House urged stronger industry regulation in the wake of the bank's stunning $2 billion loss on derivatives trading.

With more heads expected to roll, investors also punished JPMorgan's shares, sending them down more than two percent after Friday's 9.3 percent rout.

The White House said the loss was more evidence of the need to place tough controls on banks seen as systemically "too big to fail." The banks, led by JPMorgan's chief executive Jamie Dimon, have fought hard to block such curbs.

"This event even only reinforces why it was so important to pass Wall Street reform, why it is so important to fully implement Wall Street reform," said presidential spokesman Jay Carney.

"Ever since it passed, there's been millions and millions of dollars spent by Wall Street lobbyists to try to water down, delay, and render ineffective those rules," he said.

"It only reinforces why the president was right to take on this fight and why we need to make sure it's implemented."

Dimon announced on Monday that Drew, 55 and one of the highest-ranking women on Wall Street, would retire after more than 30 years at the bank.

The departure came after the bank's chief investment office (CIO), which Drew led, racked up at least $2 billion in losses in the past six weeks on trading its own assets in the complex derivatives market.

"Ina Drew has been a great partner over her many years with our firm," Dimon said in a statement.

"Despite our recent losses in the CIO, Ina's vast contributions to our company should not be overshadowed by these events," he said.

Drew had previously tendered her resignation after the extent of the losses became apparent in late April, but Dimon had refused to accept it until now, according to US media reports.

She will be replaced by Matt Zames, currently head of JPMorgan's global fixed-income unit.

No mention was made in the statement of any of the other CIO officials reportedly involved in the loss.

The Wall Street Journal said two others would likely be pushed out this week: Achilles Macris, who heads the London-based desk that placed the trades, and trader Javier Martin-Artajo, a managing director on Macris's team.

Attention has also focused on the role of another London-based JPMorgan trader, French-born Bruno Michel Iksil, nicknamed "The London Whale" and "Voldemort," after the villain in the Harry Potter books.

On Sunday, Dimon said that the loss was likely not bad enough to stop the company scoring a profit this quarter.

But he admitted that it had jeopardized JPMorgan's credibility and the banking industry's fight against tighter controls in the wake of the 2008 financial sector meltdown.

"This is a very unfortunate and inopportune time to have had this kind of mistake," Dimon admitted on NBC television.

On Sunday Senator Carl Levin said there was still pressure to water down the proposed Volcker Rule, which would ban so-called proprietary trading of the type that added to the financial sector collapse and appeared central in JPMorgan's losses.

"We've got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the (Volcker) Rule, by putting in a huge loophole," the Michigan Democrat told NBC.

"The issue is whether we are going to stick with the law, as written, which will prevent us from bailing out banks again," he said.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • SE Asia Stocks-Mostly up, Philippines rises on financials

    May 5 (Reuters) - Most Southeast Asian stock markets rose on Tuesday, bucking the regional trend on slowing growth in China, while Philippine shares hit a more than one-week high, led by financials. The ... …

  • China says Philippines violating South China Sea code

    China has accused the Philippines of violating a 13-year-old informal code of conduct in the South China Sea with its building work on disputed islets, firing back again after repeated criticism of China's own construction work. China and the 10-member Association of South East Asian Nations (ASEAN) signed an agreement in 2002 to refrain from occupying uninhabited reefs and shoals in the sea, and from building new structures that would complicate disputes. In a statement released just before …

  • NCCA plans to conduct mapping of Pag-Asa Island
    NCCA plans to conduct mapping of Pag-Asa Island

    The National Commission for Culture and the Arts (NCCA) plans to send researchers to conduct a cultural mapping of Pag-Asa Island, which is part of Philippine-held territories in the disputed Spratlys in the West Philippine Sea. Harold Rentoria, NCCA committee on cultural heritage commissioner, admitted that since two years ago they have been thinking of going to Pag-Asa Island for their cultural mapping project. Cultural mapping is part of the NCCA program Taoid – the Ilocano word for …

  • No CNN interview for senators in ‘pork’ scam
    No CNN interview for senators in ‘pork’ scam

    Cable News Network (CNN) Philippines has been denied a chance to interview detained Senators Juan Ponce Enrile, Bong Revilla, and Jinggoy Estrada, a Sandiganbayan justice said yesterday. Sandiganbayan Presiding Justice Amparo Cabotaje-Tang told The STAR CNN’s request for an interview with the lawmakers, who are being held without bail at Camp Crame, will not be allowed as such may violate a rule preventing parties to an ongoing trial from discussing the merits of the case. CNN Philippines had …

  • Tropical depression intensifies into storm
    Tropical depression intensifies into storm

    The tropical depression expected to enter the Philippine area of responsibility on Thursday has intensified into a storm, the state weather bureau said yesterday. Noul, which will be locally named Dodong once it enters the Philippines, packed winds of 75 kilometers per hour near the center and gustiness of up to 90 kph. …

  • PNP to car buyers: Demand LTO plates
    PNP to car buyers: Demand LTO plates

    Those who plan to buy new cars should make sure their car dealers give them their Land Transportation Office plates as soon as possible to avoid being targeted by car thieves, the Philippine National Police (PNP) said yesterday. Senior Superintendent Arnold Gunnacao, director of the PNP-Highway Patrol Group (HPG), said car theft syndicates are particularly interested in stealing brand new sport utility vehicles (SUVs) with conduction stickers serving as temporary license plates. …

  • SE Asia Stocks-Mixed; Indonesia and Philippines end losing streak

    JAKARTA, May 4 (Reuters) - Southeast Asian stock markets traded mixed on Monday with stocks in Indonesia and Philippines rebounding after a recent bout of weakness. The Indonesian stock index closed up ... …

  • 2 coast guard men, village chief, abducted in Philippines

    MANILA, Philippines (AP) — Police say gunmen clad in military uniform have abducted two Philippine coast guard personnel and a village chief on a southern island then sped away in two motorboats. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options