UPDATE 1-JPMorgan Chase former risk chief retires

* Barry Zubrow was on watch when derivatives risk grew

* Zubrow had been regulatory affairs head since January

(Rewrites throughout, adds comments from executives,background)

Oct 5 (Reuters) - Barry Zubrow, who was head of riskmanagement at JPMorgan Chase & Co when the bank wasbuilding a dangerously large position in credit derivatives, isretiring.

Zubrow, 59, will leave the company at the end of the year,according to an internal memo from CEO Jamie Dimon, which thebank released on Friday. Zubrow's job had changed in January tohead of corporate and regulatory affairs from chief riskofficer. In May, the company first disclosed losses on thederivatives that as of July totaled $5.8 billion.

Zubrow said in his own memo to colleagues that he willretire from banking and continue "my work in educational,governmental and other not-for-profit organizations." He begantalking to Dimon 18 months ago about retiring by the time heturns 60 in February, according to a person familiar with hisplans who did not want to be named.

The memos made no reference to Zubrow's specific work onrisk at the company. Dimon said Zubrow, who was a member of thecompany's elite operating committee for five years, "has been avalued partner and a generous mentor."

Zubrow had become a leader in JPMorgan's push againstproposed new regulations on financial institutions after hebecame head of regulatory affairs.

In February, Zubrow signed a 67-page letter to federalregulators setting out JPMorgan's opposition to proposals toimplement the so-called Volcker Rule to prohibit banks frommaking bets in the financial markets.

Zubrow's credibility was undermined in May when JPMorgandisclosed it had lost billions of dollars on credit derivativesin London where hedge funds had nicknamed a bank trader the"London Whale" because of the size of positions he took.

It did not help that Zubrow's brother-in-law, Irvin Goldman,was named the top risk manager at the chief investment office inFebruary, the month after Zubrow changed jobs. Goldman, whoresigned from JPMorgan in July, had been working in the CIOoffice before Zubrow joined the company.

In July, JPMorgan said an internal examination had foundnumerous and long-standing deficiencies in risk management inthe chief investment office.

Zubrow was hired to be chief risk officer for the entirebank from November 2007. During his tenure JPMorgan was praisedfor having emerged from the financial crisis as one of thestrongest of the big U.S. banks because of its conservativebusiness practices.

Zubrow previously worked for 25 years at Goldman Sachs GroupInc where he became chief administrative officer.

After the London Whale losses appeared, people inside andoutside the bank expected Zubrow's profile to decline. InSeptember, the bank said Blythe Masters, head of the company'scommodities business, would also handle regulatory affairs forits corporate and investment bank.

The Wall Street Journal reported earlier on Friday thatZubrow would likely leave his regulatory post.

(Reporting by David Henry in New York and Sruthi Ramakrishnanin Bangalore; Editing by Bernard Orr)


Messaging: david.henry.reuters.com@reuters.net))