March 22, 1969 |
|Alma mater||Trinity College, Cambridge|
|Occupation||Head of Global Commodities at J.P. Morgan|
|Known for||Led creation of Credit default swaps|
Blythe Sally Jess Masters (born 22 March 1969) is an economist and former head of Global Commodities at JPMorgan Chase. From 2004-2007, she was Chief Financial Officer of JPMorgan Chase's Investment Bank and previously served as the Head of Global Credit Portfolio and Credit Policy and Strategy.
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, and joined the bank J.P. Morgan after completing a number of internships there while still a student.
Responsible for the structuring and distribution of credit derivative products at J.P. Morgan, Masters became a managing director at 28, the youngest woman to achieve that status in the firm's history. She is widely credited with creating the modern credit default swap, a form of insurance that protects a lender if a borrower of capital defaults on a loan. 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 sold the credit risk from the credit line to the European Bank of Reconstruction and Development in order to cut the reserves which J.P. Morgan was required to hold against Exxon's default, thus improving its own balance sheet. J.P. Morgan later bundled together packages of these loans 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, Masters was described by the UK newspaper The Guardian as "the woman who invented financial weapons of mass destruction". She has rejected this as simplistic, telling the newspaper: "I do believe CDSs [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".
In 2006 she was named J.P. Morgan's head of Global Commodities. She has frequently represented the industry in Washington D.C. on everything from potential curbs on commodities trading to the financial regulatory overhaul.
From 2004 to 2007, she was chief financial officer of the Investment Bank, and previously served as the head of Global Credit Portfolio and Credit Policy and Strategy, responsible for managing the credit and market risks of the bank's retained credit positions, the development of credit strategy, policies, infrastructure and limits to measure and control credit risk.
Masters is a current board member and chair emeritus of the Securities Industry and Financial Markets Association.
In 2014, Masters withdrew from an advisory panel to the Commodity Futures Trading Commission, a day after the agency disclosed her appointment to the panel.
Masters is the former Board Chair of the NY Affiliate of the breast cancer charity, Susan G. Komen for the Cure. Her hobbies include amateur horse-riding. She lives in New York with her husband and their daughters.
- David Teather (2008-09-20). "The woman who built financial 'weapon of mass destruction' | Business". London: The Guardian. Retrieved 2010-05-19.
- "HBS Women's Association of New York". Hbswany.org. Retrieved 2010-05-19.
- Fitzpatrick, Dan (2010-10-09). "J.P. Morgan Commodities Chief Takes the Heat". The Wall Street Journal.
- "Outsmarted: High finance vs. human nature". The New Yorker.
- "Credit derivatives: The great untangling". The Economist. 2008-11-06.
- "Europe, Derivatives And Increased Transparency To Understand Risks". Gov Monitor. 2010-05-02. Retrieved 2010-05-19.
- "Blythe Masters Head of Global Commodities".
- "J.P. Morgan’s Blythe Masters Withdraws From CFTC Panel Bank's Commodities Chief Steps Down a Day After Her Appointment Was Announced". Wall Street Journal.
- "Blythe Masters – 2004 40 Under 40 – Crain's New York Business Rising Stars". Mycrains.crainsnewyork.com. Retrieved 2010-05-19.