The International Swaps and Derivatives Asociation is expected to name a few chairman today to replace Joseph Bauman, who stepped down this week after only one year at the helm.
The association's board of directors met yesterday in Europe to select a new chairman.
The association's by-laws forced Bauman, who joined Bank of America from Citibank last week, to step down after changing jobs.
The surprise transition comes at a difficult time for ISDA, an industry group composed of more than 150 financial institutions active in derivatives.
Because of recent market volatility and interest rate spikes, derivatives have received bad publicity. Noted names in the news include Proctor & Gamble Co., which took a $157 million loss on a leveraged swap. And a recent Time magazine cover story warned of an impending financial catastrophe because of derivatives.
At the same time, regulators and legislators are taking a hard look at imposing new rules on firms that buy or sell derivatives. The General Accounting Office said this week that it will release a report on the industry, expected to be highly critical, on May 18.
Bauman was one of the most prominent defenders of the besieged products. Frequently cited in the press, Bauman sent a letter to reporters only three weeks ago, which included a 17-page explanation and defense of swaps and related products.
Bauman also met with officials from the GAO last year after its survey on derivatives sparked wide-spread industry complaints, market sources said.
Bauman will head U.S. financial engineering and risk management at Bank of America. He will report to Robert McKnew, head of U.S. capital markets at the bank.
At Citibank, Bauman was head of business development for global derivatives. Prior to 1992, he worked in the derivatives area at Chemical Banking Corp.
"We wish Joe every success at Bank of America," Dipak Rastogi, head of global derivatives at Citibank, said in a statement. "Joe has been a constructive force in the derivatives industry through his work at ISDA."
Bauman's former responsibilities will be assumed by existing employees at Citibank, a spokeswoman for the bank said.