JP Morgan restructures credit and interest rate operations

JP Morgan Chase is creating a global credit management group, incorporating credit risk management, corporate banking and credit lending. The new division is intended to reflect a market trend away from differentiating between different debt instruments offered to clients, according to a source at the bank. She denied the restructuring was due to recent large losses to single name credits, such as Enron.

Don McCree will head the new division and will report to Marc Shapiro, head of finance, risk management and administration for JP Morgan. William Demchak, head of credit portfolio and structured finance, and Bill Parsely, head of global books, will leave the firm.

RiskNews obtained a copy of the internal memo written by Bill Winters and Don Wilson, global co-heads of credit and rate markets. The memo portrays the reorganisation as part of the continuing streamlining process following the merger of JP Morgan and Chase Manhattan. “To streamline the firm’s wholesale credit businesses and align them more closely with our client activities, we will form a new global credit management group…which will include credit risk management (primary credit approval function); credit portfolio group (secondary risk management function); and corporate banking/credit and lending (the groups supporting primary, secondary and client activities).”

The memo also outlines JP Morgan’s proposal to integrate its interest rate products: “We will form regional interest rate businesses which embrace interest rate derivatives, government bonds and agencies.”

Mark Werner becomes head of North American interest rates, Rob Standing becomes head of European interest rates and Bart Broadman becomes the interest rate product head for Asia.