22 March 1969 |
|Alma mater||Trinity College, Cambridge|
|Occupation||Former head of global commodities at J.P. Morgan|
|Known for||Led development of Credit default swaps|
Born in Oxford, Masters was raised in the south-east of England. She attended The King's School in Canterbury on scholarship. She graduated in 1991 from Trinity College, Cambridge with a B.A. in economics.
Masters joined the bank JP Morgan Chase in 1991 after completing a number of internships there while still a student dating back to 1987. Responsible for credit derivative products at J.P. Morgan, Masters became a managing director at 28, the youngest person to achieve that status in the firm's history. She is widely credited with creating the modern credit default swap, a derivative used to manage credit exposure to underlying reference entities. In 1994, J.P. Morgan had extended a $4.8 billion credit line to Exxon, which faced the threat of $5 billion in punitive damages for the Exxon Valdez oil spill. A team of J.P. Morgan bankers led by Masters then purchased credit protection against the credit line to the European Bank of Reconstruction and Development to cut the capital which J.P. Morgan was required to hold against Exxon's default, thus reducing its own risk. J.P. Morgan later bundled together packages of such exposures and offered them to market as BISTRO, for Broad Index Secured Trust Offering, and these new financial instruments were quickly adopted by other banking institutions.
When derivatives played a role in the 2008 financial crisis, having been applied by other firms to sub-prime mortgages, Gillian Tett's book, Fool's Gold: How the Bold Dreams of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, documented how the original intent and features of credit derivatives had been distorted. Nonetheless, Masters was described by the UK newspaper The Guardian as "the woman who invented financial weapons of mass destruction". The paper later apologised for failing to give Masters an adequate opportunity to respond to their characterisation. She had told the newspaper: "I do believe CDS [credit default swaps] have been miscast, much as poor workmen tend to blame their tools." She explained to The Economist, "Tools that transfer risk can also increase systemic risk if major counterparties fail to manage their exposures properly." In April 2010 she told the Economic and Monetary Affairs Committee of the European Parliament that "there are definitely lessons that have to be learnt. I for one feel that I have learnt from that experience and there are things I may like to have seen done differently". She stated support for reforms which increase transparency and reduce the risk of contagion among financial firms.
From 2001–2004, Masters served as the bank's head of Global Credit Portfolio and Credit Policy and Strategy. From 2004 to 2007, she was chief financial officer of J.P. Morgan's Investment Bank. In 2007 she was named head of Global Commodities. By 2014, J.P. Morgan had surpassed its competitors and was the top commodities bank according to Coalition when J.P. Morgan announced the sale of its physical commodities business for $3.5bn. Masters subsequently announced her decision to leave the bank once the sale was complete.
Masters was the Chair of the Securities Industry and Financial Markets Association from 2008–2010 and also of the Global Financial Markets Association from 2012–2014, trade associations whose missions include promoting public trust and confidence in financial markets. She has frequently represented the industry in Washington D.C. on everything from the design of carbon markets to address global warming to potential curbs on large commodities trading positions to the financial regulatory overhaul.
Masters is the former Board Chair of the NY Affiliate of the breast cancer charity, Susan G. Komen. She is a current board member of The Breast Cancer Research Foundation and The Global Fund for Women. She is an amateur equestrian and lives in New York with her husband and daughter.
- David Teather (20 September 2008). "The woman who built financial 'weapon of mass destruction' | Business". London: The Guardian. Retrieved 19 May 2010.
- "HBS Women's Association of New York". Hbswany.org. Retrieved 19 May 2010.
- Fitzpatrick, Dan (9 October 2010). "J.P. Morgan Commodities Chief Takes the Heat". The Wall Street Journal.
- "Outsmarted: High finance vs. human nature". The New Yorker.
- Fool's Gold: ISBN 978-1-4165-9857-2, Spear's Book Awards Financial Book of the Year 2009.
- "Credit derivatives: The great untangling". The Economist. 6 November 2008.
- "Europe, Derivatives And Increased Transparency To Understand Risks". Gov Monitor. 2 May 2010. Retrieved 19 May 2010.
- "Blythe Masters". LinkedIn.
- "J.P. Morgan Passes Goldman, Morgan Stanley as Top Energy Dealer". Wall Street Journal.
- "JPMorgan named top commodities bank, day after selling physical business". Reuters.
- "JPMorgan Agrees to Sell Commodities Unit for $3.5 Billion". Bloomberg.
- "Blythe Masters Ends 27-Year Run at JPMorgan". Bloomberg.
- "Blythe Masters – 2004 40 Under 40 – Crain's New York Business Rising Stars". Mycrains.crainsnewyork.com. Retrieved 19 May 2010.