May 14, 2012 at 10:01 AM ET
Wall Street, not known for gender diversity in its upper echelons, just lost one of its top-ranking women executives Monday.
Ina Drew, who headed trading strategy at JPMorgan Chase as its chief investment officer, is retiring in the wake of a trading error that cost the nation's largest banking company $2 billion so far and re-energized the debate over too-big-to-fail and government regulation of banking. Drew, 55, had worked for the bank for 30 years, rising to become one of Chairman and CEO Jamie Dimon's top lieutenants.
She is being replaced by Matt Zames, who is the co-head of the bank's global fixed income unit, JPMorgan said in a statement.
Drew was in charge of the London trading unit responsible for the trading error. Drew's resignation was expected after news reports over the weekend said she and two traders from the London unit would be stepping down.
"Ina Drew has been a great partner over her many years with our firm. Despite our recent losses in the CIO, Ina's vast contributions to our company should not be overshadowed by these events," said Dimon.
"We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day," he said.
Drew had offered to resign several times since Dimon disclosed the trading loss on Thursday, a person familiar with the matter told The Associated Press on Sunday.
At least two other executives at the bank will be held accountable for the mistake, the person said.
Drew was paid $15.5 million last year and almost $16 million in 2010, making her one of the highest-paid officials at JPMorgan, according to a regulatory filing.
Drew declined comment through a bank spokeswoman on Sunday. The Wall Street Journal and the New York Times reported Sunday that she and two other executives were expected to resign soon.
The Journal also reported that Bruno Iksil, the JPMorgan trader identified as the "London whale" because of the giant bets he placed, was also likely to leave, but the paper reported that it was not clear when that would happen.
The surprise loss has been a black eye for the bank and for Dimon, who is known in the industry both as a master of risk management and as an outspoken opponent of some proposed regulation since the crisis.
Dimon said in a TV interview aired Sunday that he was "dead wrong" when he dismissed concerns about the bank's trading last month. "We made a terrible, egregious mistake," Dimon said in an interview that was taped Friday and aired on NBC's "Meet the Press."
"There's almost no excuse for it." Dimon said he did not know the extent of the problem when he said in April that the concerns were a "tempest in a teapot." The loss came in the past six weeks.
Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.
A piece of financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.
Rep. Barney Frank, D-Mass., told ABC's "This Week" that he hopes the final version of the Volcker rule will prevent the type of trading that led to the massive loss at JPMorgan.
Dimon conceded to NBC that the bank "hurt ourselves and our credibility" and expects to "pay the price for that."
Asked what the price should be, Sen. Carl Levin, D-Mich., said that banks will lose their fight to weaken the rule. "This was not a risk-reducing activity that they engaged in. This increased their risk," Levin told NBC. "So we've got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole" that includes the trading involved in the JPMorgan loss, he said.
Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank's employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.
Dimon told NBC that he supported giving the government the authority to dismantle a failing big bank and wipe out shareholder equity. But he stressed that JPMorgan, the largest bank in the United States, is "very strong."
Addressing public anger toward Wall Street, Dimon said he wants a more equitable society and does not mind paying higher taxes. But he said attacking all of business is "very counterproductive.
The Associated Press contributed to this report.