Top JP Morgan Exec Steps Down Over $2bn Loss
The chief investment officer of America's biggest bank has quit after a trading blunder resulted in a shock $2bn (£1.2bn) loss.
JP Morgan Chase has accepted the resignation of its chief investment officer, Ina Drew, who was paid $15.5m (£9.6m) last year, making her one of the bank's highest-paid executives.
The trading team responsible for the loss, led by Ms Drew, had taken financial bets designed to protect the bank by hedging against its other investments.
But the strategy backfired during the last six weeks, forcing the bank to report an unexpected loss.
Matt Zames, currently co-head of global fixed income in the investment bank, will succeed her, JP Morgan said.
The company's boss praised Ms Drew's work at the bank.
"Ina Drew has been a great partner over her many years with our firm," chief executive Jamie Dimon said.
"Despite our recent losses... Ina's vast contributions to our company should not be overshadowed by these events."
Two other company executives are also expected to be held accountable for the mistake.
A trader that worked out of the UK, known as the 'London Whale' because of the size of his trades, is also thought to be under investigation.
Since the loss came to light, the bank has lost $15bn (£9.3bn) in market value and seen its credit rating fall.
Mr Dimon admitted he was "dead wrong" to have dismissed concerns about the bank's trading last month.
"I obviously didn't know because I never would have said that," he said on American television channel, NBC.
But he insisted the bank is still "very strong".
"We took a $2bn loss and we made it clear it could get worse before it gets better," he said.
"I do want to put in perspective, the company is going to earn a lot of money this quarter, and so it's a very strong company.
"We made a terrible, egregious mistake, there is almost no excuse for it."
The loss comes as an embarrassment to the bank, which came through the financial crisis relatively unscathed.