London: Deutsche Bank AG moved the trader leading the wind-down of a $1.1 trillion credit-default swaps portfolio to a role in emerging-market bonds, according to an internal memorandum obtained by Bloomberg.
Aditya Singhal, described as “one of the most profitable traders” at Deutsche Bank’s European credit business, will become head of local markets trading for central and eastern Europe, the Middle East and Africa, according to the memo. Tijen Gumusdis, co-head of CEEMEA local markets, will become head of flow trading for the region. Charlie Olivier, a spokesman for the Frankfurt-based lender, confirmed the memo’s contents. Deutsche Bank Chief Executive Officer John Cryan has dumped unprofitable clients, exited countries and pulled back from some trading businesses in an attempt to cut expenses and meet tougher capital rules. This includes selling off a portfolio of complex credit-default swaps to rivals including Citigroup Inc. and JPMorgan Chase & Co., a process which Singhal helped oversee.
Credit-default swaps are insurance contracts that pay out if a borrower defaults on a debt. Investors use them to speculate on the borrower’s ability to repay debt or to guard against losses on the debt. The instruments helped to fuel the 2008 credit crunch and regulators have been trying to make them safer and less opaque.
