Blythe Masters

Blythe Masters
Born Blythe Sally Jess Levett
(1969-03-22) 22 March 1969
Oxford, United Kingdom
Education The King's School, Canterbury
Alma mater Trinity College, Cambridge
Occupation CEO Digital Asset Holdings
Former head of global commodities at J.P. Morgan
Known for Led development of credit default swaps
Relatives Gordon Levett (father)

Blythe Sally Jess Masters (born 22 March 1969) is an economist and former executive at JPMorgan Chase.[1] She is currently the CEO of Digital Asset Holdings, a start-up providing settlement and ledger services for both digital and mainstream assets.[2]

Biography

Education

Born in Oxford, Masters was raised in the south-east of England.[3] She attended The King's School in Canterbury on scholarship.[4] She graduated in 1991 from Trinity College, Cambridge with a B.A. in economics.[5]

Professional career

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 woman to achieve that status in the firm's history.[6] She is widely credited with creating the modern credit default swap, a derivative used to manage credit exposure to underlying reference entities.[7] 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.[7]

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.[8] 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.[4] 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."[9] 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.[10]

From 2001 to 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.[11] In 2014, J.P. Morgan had the largest revenues of any investment bank in commodities, according to United Kingdom analytics firm Coalition.[12] That same year, J.P. Morgan announced the sale of its physical commodities business for $3.5bn in the face of increased regulatory scrutiny brought on by a Federal Energy Regulatory Commission investigation into the bank’s manipulation of energy markets in California in Michigan.[13][14] J.P. Morgan paid $410 million to settle the investigation without admitting wrongdoing, but The New York Times reported that federal investigators accused Masters of making “false and misleading statements under oath.”[15] Masters subsequently announced her decision to leave the bank once the sale was complete, though Bloomberg reported that potential buyers of the commodities unit were either wary of legal issues in hiring Masters or capable of running the unit without her.[16][17]

Masters was the Chair of the Securities Industry and Financial Markets Association[5] from 2008 to 2010 and also of the Global Financial Markets Association from 2012 to 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.[6]

On March 10, 2015 the Financial Times reported that Masters had joined a startup, Digital Asset Holdings, as chief executive. Digital Asset uses digital technology to settle and record both mainstream and digital assets.[18]

In December 2015, it was posited in the media that the new Barclays CEO Jes Staley had approached Masters about running the bank’s investment banking division, however Masters indicated she was fully committed to her current role at Digital Asset Holdings.[19]

Personal life

Masters is the former Board Chair of the Greater NY Affiliate of the breast cancer charity, Susan G. Komen for the Cure.[5] She is a current board member of The Breast Cancer Research Foundation and the Global Fund for Women. She is an amateur equestrian.[20]

References

  1. ↑ "Blythe S. Masters". Businessweek.com.
  2. ↑ Michael J. Casey (11 March 2015). "Ex-J.P. Morgan CDS Pioneer Blythe Masters To Head Bitcoin-Related Startup". WSJ.
  3. ↑ http://www.debretts.com/people/biographies/browse/m/25234/Blythe%20Sally%20Jess+MASTERS.aspx
  4. 1 2 David Teather (20 September 2008). "The woman who built financial 'weapon of mass destruction' | Business". London: The Guardian. Retrieved 19 May 2010.
  5. 1 2 3 "HBS Women's Association of New York". Hbswany.org. Retrieved 19 May 2010.
  6. 1 2 Fitzpatrick, Dan (9 October 2010). "J.P. Morgan Commodities Chief Takes the Heat". The Wall Street Journal.
  7. 1 2 "Outsmarted: High finance vs. human nature". The New Yorker.
  8. ↑ Fool's Gold: ISBN 978-1-4165-9857-2, Spear's Book Awards Financial Book of the Year 2009.
  9. ↑ "Credit derivatives: The great untangling". The Economist. 6 November 2008.
  10. ↑ "Europe, Derivatives And Increased Transparency To Understand Risks". Gov Monitor. 2 May 2010. Retrieved 19 May 2010.
  11. ↑ "Blythe Masters". LinkedIn.
  12. ↑ "JPMorgan named top commodities bank, day after selling physical business". Reuters.
  13. ↑ "JPMorgan Agrees to Sell Commodities Unit for $3.5 Billion". Bloomberg.
  14. ↑ "JPMorgan’s Masters Said to Have Angled to Be CEO in Sale". Bloomberg. 2014-04-10.
  15. ↑ "JPMorgan Executive May Escape Penalty". The New York Times. 2013-08-18.
  16. ↑ "Blythe Masters Ends 27-Year Run at JPMorgan". Bloomberg.
  17. ↑ "JPMorgan’s Masters Said to Have Angled to Be CEO in Sale". Bloomberg. 2014-04-10.
  18. ↑ "Masters joins cryptocurrency start-up". Financial Times.
  19. ↑ "Exclusive: Barclays' boss wants Blythe Masters to run investment bank - source". Reuters. 3 December 2015.
  20. ↑ "Blythe Masters – 2004 40 Under 40 – Crain's New York Business Rising Stars". Mycrains.crainsnewyork.com. Retrieved 19 May 2010.

External links

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