JPMorgan and Citigroup Name New Chief Risk Officers
In recent days, what Toomre Capital Markets LLC ("TCM") considers to be two of the most challenging Chief Risk Officer ("CRO") roles in the financial services sector have been filled. Both JP Morgan Chase with its considerable Credit Default Swap ("CDS"), leveraged loan and other large derivative exposures and Citigroup with its kitchen-sink collection of issues have named new CROs.
On Monday November 26th 2007, JPMorgan Chase announced that former Goldman Sachs managing director and chief administrative officer, Mr. Barry Zubrow, had been hired as its Chief Risk Officer. Starting December 1st, Mr. Zubrow will be reporting directly to CEO Jamie Dimon and will be a member of JP Morgan's Operating Committee. Earlier in his career, Mr. Zubrow was Chief Credit Officer and co-head of the Goldman Sachs risk committee that oversaw that investment bank's strong risk culture which is credited with helping Goldman Sachs steer clear of much of the losses associated with this year's subprime meltdown.
Apparently, CEO JPMorgan Jamie Dimon had been fulfilling this role for the bank since former CRO Don Wilson retired at the end of 2006. JPMorgan's recent performance during the credit market turmoil suggests that, unlike former Merrill Lynch CEO Stan O'Neal who apparently was off playing golf on many business days during the summer seizures, Jamie DImon was very much hands on (like Goldman Sachs CEO Lloyd Blankfein and Lehman Brothers CEO Dick Fuld were widely reported to be). Is it any wonder then that JPMorgan, Goldman Sachs and Lehman Brothers have fared relatively well during the mortgage credit crunch, especially when compared to Citigroup, Merrill Lynch, and Bear Stearns?
Earlier in November on the sixteenth, Citigroup named Jorge Bermudez to replace David Bushnell as its Chief Risk Officer. As this Citigroup press release explains, Mr. Bermudez will have "responsibility for market, credit, and operational risk and compliance around the world for Citi and all of its subsidiary companies. The appointment is effective immediately, and Mr. Bermudez will report directly to acting CEO Sir Win Bischoff."
The press release goes on to explain that the bank has created a risk "advisory committee of senior leaders from across the company that will provide input on ways to strengthen Citi's risk management processes. Mr. Bermudez has appointed three initial members to that Committee: Brian Leach, Chief Risk Officer and Co-COO for Old Lane; David Lipton, Head of Global Country Risk and former Undersecretary of Treasury for International Affairs; and Hamid Biglari, Head of Investment Banking's Financial Institutions Group. These members, and others who will be named over time, will serve on the committee while retaining their ongoing responsibilities within Citi."
During his 30-year career at Citigroup, Mr. Bermudez has served as Head of Risk for the Corporate Banking Division in North America; Head of Risk for the International Banking & Finance Group, where he was responsible for credit and market risk across the investment, corporate and commercial banking areas; Head of Credit Policy for Latin America. Also during his Citigroup career, he served as Chief Executive Officer of Citi Latin America, where he was responsible for the Consumer, Private Banking, Asset Management, and Corporate & Investment Banking businesses. His most recent assignment was as Chief Executive Officer and President of Citi's Commercial Business Group in North America and Citibank Texas, and he serves as a member of Citi's Operating and Management Committees.
Toomre Capital Markets LLC wishes both of these individuals well as they assume these very challenging CDO positions.