(Corrects firm’s name in fifth paragraph.)
Calello died in New York of non-Hodgkin’s Lymphoma, the bank said in a statement. He stepped down as chief executive officer of the Zurich-based company’s investment bank in September 2009 to undergo treatment for cancer. Calello relinquished his title almost 10 months later to acting CEO Eric Varvel and became chairman of the unit.
“Paul Calello was an outstanding leader, and a down-to- earth, very human colleague who forged strong relationships and made a positive difference in the world around him,” Credit Suisse CEO Brady Dougan, 51, said in an e-mailed statement. “We will miss him greatly.”
Calello and Dougan were part of the Bankers Trust Corp. team that left in 1990 to start Credit Suisse Financial Products, a derivatives subsidiary of the Swiss bank. Dougan and Calello ascended the ranks as derivatives -- contracts with values derived from assets or events -- became an increasingly important money-maker for Wall Street.
Calello, a Boston native, received an MBA from Columbia University’s Business School in New York. He was a member of the board of overseers at the school, which in October announced the establishment of the Paul Calello Professorship in Leadership and Ethics. The permanent chair was endowed by a group of Credit Suisse colleagues.
“I knew him in Asia when times were really good and he was a terrific manager, but I also knew him in New York when times were bad,” said Glenn Hubbard, dean of the business school. “It’s a rare guy who’s good in both good times and bad.”
Calello stood out as a leader during the financial crisis by advising the Federal Reserve Bank of New York on policy matters and reforming Credit Suisse’s compensation system, said Hubbard, who served as chairman of President George W. Bush’s Council of Economic Advisors from 2001 to 2003. In a January article Calello wrote for the Economist, he suggested creating a “bail-in process” that would replace the need for banks to get bailouts.
Calello started his career with research jobs at the Federal Reserve in Boston and Washington before joining Bankers Trust. He was on a short list of candidates to replace Timothy F. Geithner as president of the New York Fed in 2009, after Geithner was nominated to be Treasury secretary. William Dudley, who ran the New York Fed’s financial-markets division, got the job.
During his 20-year career at Credit Suisse, Calello held jobs in London, Hong Kong, New York and Tokyo. He served as global head of fixed-income derivatives and commodities from 1992 to 2000 and became a member of the bank’s executive board in 1997. In 2002, Calello became chairman and CEO of Credit Suisse’s investment bank in the Asia-Pacific region and in 2006 he gained responsibility for all the bank’s activities in Asia.
While Calello was running the business in Asia, Credit Suisse won roles arranging the $22 billion initial public offering of Industrial & Commercial Bank of China Ltd., the $9.2 billion IPO of China Construction Bank Corp. and the $3.5 billion IPO of China Life Insurance Co. Ltd.
When Dougan was promoted to Credit Suisse CEO in May 2007 from his role running the investment bank, Calello succeeded him and moved to New York from Hong Kong. As the financial crisis engulfed Wall Street, Calello and Dougan curbed risk-taking and helped Credit Suisse avoid government bailouts required by competitors like UBS AG and Citigroup Inc.
Attended Lehman Meeting
Calello, who attended the 1998 emergency meeting at the New York Fed that helped engineer a rescue of hedge fund Long-Term Capital Management LP, was again at the Fed a decade later for a weekend meeting that unsuccessfully tried to save Lehman Brothers Holdings Inc.
In Dec. 2008, responding to criticism of bonuses following the financial crisis and bank bailouts, Calello used some of the illiquid loans and bonds weighing down the lender’s balance sheet to pay bankers.
Instead of cash or stock, managing directors and directors received a stake in a pool of about $5 billion of leveraged loans and commercial mortgage-backed debt. The plan was described as “monstrously clever,” by Dirk Hoffman-Becking, an analyst at Sanford C. Bernstein Ltd. in London. As of August 2009, the pool was said to have returned 17 percent.
Enjoyed Public Duties
An athlete who said he preferred running and cycling to watching sports like baseball, Calello lived in Brooklyn and sometimes commuted to his downtown Manhattan office on a Vespa. He also said he relished the public duties of his job, such as hosting client lunches at the World Economic Forum in Davos, Switzerland, as well as speaking to the press.
Calello was a member of the Foreign Policy Association board of directors, the board of the New York Philharmonic and the Council on Foreign Relations. He also served as a trustee to the Credit Suisse Foundation.
Calello is survived by his wife, Jane DeBevoise, a daughter and three sons.
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