JPMorgan Chase & Co. (NYSE:JPM) said it has named Matt Zames Chief Investment Officer, replacing retiring Ina Drew, days after the company disclosed that it suffered a hefty $2 billion trading loss in its synthetic credit portfolio.
Matt Zames, currently co-head of Global Fixed Income in the Investment Bank and head of Capital Markets within the Mortgage Bank, will succeed Ina Drew as the firm's Chief Investment Officer and continue in his mortgage-related responsibilities. Matt will also join the firm-wide Operating Committee.
Daniel Pinto, currently co-head of Global Fixed Income with Matt, will become sole head of the group. Daniel will also remain CEO of the company's Europe, Middle East and Africa region, based in London.
Mike Cavanagh, CEO of the company's Treasury & Securities Services (TSS) group, will lead a team of senior executives from across the company to oversee and coordinate its firm-wide response to the recent losses in the Chief Investment Office.
Late Thursday, JPMorgan said since March 31, 2012, its Chief Investment Office has had hefty mark-to-market losses in its synthetic credit portfolio that has proved to be more riskier than expected.
Following the disclosure by the company, Fitch Ratings downgraded JPMorgan's long-term issuer default rating (IDR) to 'A+' from 'AA-' and its short-term IDR to 'F1' from 'F1+'. Fitch also has placed long-term ratings of JPMorgan on Rating Watch Negative.
In addition, Standard & Poor's lowered its ratings outlook on JPMorgan to negative from stable. S&P's affirmed 'A/A-1' issuer credit ratings on JPM and 'A+/A-1' issuer credit ratings on its banking subsidiaries.
JPM is trading down 2.60% at $36 on Monday. The stock has been trading between $27.85 and $46.49 for the past 52 weeks.