Institutional Investor (June 8)
Jamie Dimon “may well have signaled the end of an era for big global banks.” The JP Morgan Chase CEO admitted his bank had lost at least $2 billion in derivatives trades. “For three decades the fixed income, commodities and currencies business has been the cash cow of investment banks.” Demand for FICC, as this cash cow is commonly known, products has been slumping and banks have been struggling to comply with stricter capital requirements. “And now, thanks to JPMorgan’s losses, heightened demands for restrictions on virtually any proprietary trading or risky hedging, will impact the FICC business at most banks, hurting their profits and forcing them to rethink their strategies. Some business lines are likely to be closed or sold off.”
Jamie Dimon “may well have signaled the end of an era for big global banks.” The JP Morgan Chase CEO admitted his bank had lost at least $2 billion in derivatives trades. “For three decades the fixed income, commodities and currencies business has been the cash cow of investment banks.” Demand for FICC, as this cash cow is commonly known, products has been slumping and banks have been struggling to comply with stricter capital requirements. “And now, thanks to JPMorgan’s losses, heightened demands for restrictions on virtually any proprietary trading or risky hedging, will impact the FICC business at most banks, hurting their profits and forcing them to rethink their strategies. Some business lines are likely to be closed or sold off.”
Tags: Banks, Derivatives, FICC, Jamie Dimon, JP Morgan
