* 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 risk management at JPMorgan Chase & Co when the bank was building a dangerously large position in credit derivatives, is retiring.
Zubrow, 59, will leave the company at the end of the year, according to an internal memo from CEO Jamie Dimon, which the bank released on Friday. Zubrow's job had changed in January to head of corporate and regulatory affairs from chief risk officer. In May, the company first disclosed losses on the derivatives that as of July totaled $5.8 billion.
Zubrow said in his own memo to colleagues that he will retire from banking and continue "my work in educational, governmental and other not-for-profit organizations." He began talking to Dimon 18 months ago about retiring by the time he turns 60 in February, according to a person familiar with his plans who did not want to be named.
The memos made no reference to Zubrow's specific work on risk at the company. Dimon said Zubrow, who was a member of the company's elite operating committee for five years, "has been a valued partner and a generous mentor."
Zubrow had become a leader in JPMorgan's push against proposed new regulations on financial institutions after he became head of regulatory affairs.
In February, Zubrow signed a 67-page letter to federal regulators setting out JPMorgan's opposition to proposals to implement the so-called Volcker Rule to prohibit banks from making bets in the financial markets.
Zubrow's credibility was undermined in May when JPMorgan disclosed it had lost billions of dollars on credit derivatives in 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 in February, the month after Zubrow changed jobs. Goldman, who resigned from JPMorgan in July, had been working in the CIO office before Zubrow joined the company.
In July, JPMorgan said an internal examination had found numerous and long-standing deficiencies in risk management in the chief investment office.
Zubrow was hired to be chief risk officer for the entire bank from November 2007. During his tenure JPMorgan was praised for having emerged from the financial crisis as one of the strongest of the big U.S. banks because of its conservative business practices.
Zubrow previously worked for 25 years at Goldman Sachs Group Inc where he became chief administrative officer.
After the London Whale losses appeared, people inside and outside the bank expected Zubrow's profile to decline. In September, the bank said Blythe Masters, head of the company's commodities business, would also handle regulatory affairs for its corporate and investment bank.
The Wall Street Journal reported earlier on Friday that Zubrow would likely leave his regulatory post.
(Reporting by David Henry in New York and Sruthi Ramakrishnan in Bangalore; Editing by Bernard Orr)
Keywords: JPMORGAN EXECUTIVE/ZUBROW