BNP Paribas has changed the reporting line for its London-based European securitization research group so that it now reports to a banker--Ra Sharma, global head of structured credit syndicate, instead of to the head of credit strategy.
The moveraised eyebrows among other European ABS research heads in light of the conflict of interest issues arising from New York Attorney General Eliot Spitzer's investigations of Merrill Lynch. Sharma said the reporting lines are "not formal" and that he is simply overseeing the research group. Previously, ABS research had reported into Alan Capper, head of credit strategy, who in turn reports to Eric Dumas, head of primary and secondary trading for high-grade corporates. Both Capper and Dumas were on vacation and could not be reached for comment.
A global head of securitization research at a rival firm said he is very surprised that, given Spitzer's investigations in New York, a firm would elect to give analysts a hard reporting line to the banking side of the business. He argues that it makes it difficult for analysts to maintain their independence and the integrity of their research. "Of course we're part of the product group, because you need to bring value to the franchise, but that's different from a hard reporting line," he said.