JPMorgan Chase & Co. promoted Matt Zames to co-chief operating officer alongside Frank Bisignano as the biggest U.S. bank shakes up its management following a $5.8 billion trading loss.
James "Jes" Staley, who was chief executive officer of JPMorgan's investment bank, was moved out of daily operations and assigned the new position of chairman of the corporate and investment bank, the New York-based firm said today in a statement. Staley, 55, will transition "his current responsibilities to new leaders in the business," JPMorgan said in the statement.
The shuffle moves Staley out of a major operating role while expanding the role of Zames, 41, whom Chief Executive Officer Jamie Dimon, 56, named in May to clean up the chief investment office following the loss. Zames will still be in charge of the CIO, the firm said. Bisignano, 52, who was appointed to run mortgage banking last year, will transition that business to Gordon Smith, who will run the consumer business with Todd Maclin.
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"I see this as a continued response to the embarrassment and the gaffe that was the last quarter," said Michael Holland, chairman of New York-based Holland & Co., which oversees more than $4 billion, including shares of JPMorgan. Holland said it was typical for Dimon to remake the management team, "which after all is the key to all of these successes and failures."
Mike Cavanagh and Daniel Pinto will become co-CEOs of the corporate and investment bank, which combines the investment bank, treasury and securities services, and the global corporate bank business, according to the statement. The move comes as some finance leaders including former Citigroup Inc. CEO Sanford "Sandy" Weill call for the breakup of the biggest U.S. banks.
"Staley's basically becoming a diplomat," said David Hendler, an analyst at CreditSights Inc. in New York. "He's working on the big picture issues but the day-to-day activities seems to be gravitating to Cavanagh and Pinto."
JPMorgan fell 0.3 percent to $35.70 at 9:51 a.m. in New York. The firm's shares have climbed 7.3 percent this year, compared with a 15 percent gain for the 24-company KBW Bank Index.
Zames succeeded Ina Drew as head of the CIO after she retired in May following the loss from derivatives trading by its London office. Zames shook up the unit's leadership and announced a "renewed focus" on hedging risks.
JPMorgan hired Zames from Credit Suisse First Boston in 2004 to run trading in Treasuries, agencies and interest-rate swaps and options. In 2009, Zames and Pinto were picked to run fixed income after Staley took over the firm's investment bank from William Winters and Steven Black.
Under Zames and Pinto, JPMorgan has become the top bank globally in fixed-income trading. The firm's 17 percent market share in 2011 was a record for Wall Street, Staley told shareholders earlier this year.
Bloomberg News
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