[ by Howard Haykin ]

Nearly four months since Ina Drew resigned as head of Chief Investment Office ("CIO") in London, JPMorgan Chase has selected a successor to that position.  Craig Delany, who was most recently the COO of JPMorgan's mortgage banking unit, will take charge of the chief investment office.

Over the past few months, the bank has done what it could to "close the book" on this horrendous series of complex credit transactions that, at last count, has cost JPMorgan Chase much more than the nearly $6 billion in trading losses that initially was estimated to be in the range of $2 billion.  Other losses include:

• Billions have been shaved off of the market value of JPMorgan Chase, when the price of its publicly traded stock dropped precipitously. 
• The bank has significantly reshuffled its management ranks - focusing specifically on the CIO.  The latest move came Thursday, when the 4th shake-up in the executive suite in just over a year was announced.  
• Chairman and CEO Jamie Dimon, once lauded as one of the keenest risk managers on Wall Street, has been shamed by the trading blunder, by quoting wrong estimates, by his taking some of the managerial responsibilities for the shortcomings and deficiencies that contributed to the huge trading loss.  He's also testified at countless government hearings - and, for the first time in his life, he could not convince everyone that what he had to say was the real truth and the whole truth. 
• The bank continues to contend with ongoing and new investigations- just yesterday, a Senate committee announced that it would launch a detailed investigation.

Back to Craig Delany, the new Head of the Chief Investment Office, based in London. Thursday's appointment follows a broader reorganization in July.  That move was intended to strengthen JPMorgan's focus on its clients, as profit in other areas is threatened by regulatory changes and the persistent gloom in Europe.  Mr. Delany, 41, joins a stable of younger executives, including Matthew Zames, 41, and Michael Cavanagh, 46, known for their skill at turning around particularly troubled operations.  Craig Delany will report to Mr. Zames.

An email announcing the management changes had this to say about Mr. Delany: "Craig has been in the center of some of the company's toughest challenges, including the 2008 financial crisis, the acquisition of Bear Stearns, and helping to lead the turnaround of our mortgage division following the housing collapse."

The CIO was started about 5 years ago, then it grew from a sleepy operation into a profit center. In an interview on Thursday, Mr. Delany said that the unit was going to continue its original mandate of making conservative investments.  To emphasize his point, Mr. Delany said:  "I really hope that and intend that this will be a very boring job, which is what it was before this debacle."

Much of the management reorganization has focused on the chief investment office, the unit responsible for the trading losses, which have swelled to $5.8 billion. The most notable casualty of the trading mess was Ina Drew, who resigned as head of that office on or about 5/13, shortly after the losses were announced.  Once among Mr. Dimon's most trusted lieutenants, Ms. Drew was replaced by Mr. Zames in May.

Beyond Ms. Drew, other executives at JPMorgan have lost influence as part of the executive overhaul at the bank. In July's shake-up, for example, the position of Doug Braunstein, the chief financial officer, weakened. He now reports to Mr. Zames instead of Mr. Dimon. Even executives considered the natural heirs to Mr. Dimon lost power in July's management moves. Jes Staley gave up his day-to-day management of the investment bank.

With all these moves, there's also been considerable speculation about who may succeed Mr. Dimon one day. People close to the bank say that Mr. Dimon, who is 56, does not have plans to hand over the reins for at least five years. 

JMorgan's Reassuring Message to Investors.   The management changes send a reassuring message to investors, rattled by the trading misstep, bank analysts said. During its second-quarter earnings call this year, Mr. Dimon emphasized that the bank would emerge from its trading debacle stronger.

For further details, go to:  [NYTimes, 9/6/12].