When Blythe Masters makes a pronouncement about the future, it's worth paying attention. As Bloomberg amply points out, the ex-CFO of J.P. Morgan's investment bank invented credit default swaps (CDS) in her 20s and became head of the bank's global credit derivatives unit aged 30.
Irrespective of the chaos that ensued in the CDS market, Masters clearly has a feel for the financial zeitgeist. Seventeen years later, she's still putting it to good affect.
If you want to get ahead in finance in 2025, Masters would have it that you need to understand blockchain - 'the blockchain' to the cognoscenti. If you haven't encountered it, the blockchain is code: a decentralized peer-to-peer network/ledger that records Bitcoin transactions. 'Every 10 minutes, coders around the world known as miners race to be the first to solve mathematical equations and record transactions made with bitcoins as entries, or blocks, on a digital ledger,' says Bloomberg. Each new coded block is connected to the prior block in the digital chain - hence the chain.
If Masters is right, the blockchain will revolutionize finance. In future, she predicts that buyers and sellers will use distributed blockchains to transfer ownership of securities. Trades could be settled in minutes rather than weeks and authorities could be given access to ledgers to ensure there's no contravention of regulations.
Most importantly, Masters points out that if the settlement of - say - syndicated loans can be reduced to 20 minutes from 20 days, banks' capital requirements will be greatly reduced. “I’ve always been motivated to innovate where the implications are significant,” says Masters. You have been warned.
Separately, if you type something like, 'python lambda function list comprehension' into Google, Google will try to hire you. Seriously. It happened to Max Rosett.
The man who created Goldman Sachs’ attempt to e-trade corporate bonds says that big investment banks lack the scope to foster new technology.
This man quit his senior investment banking job to start a blog, for which he will receive no money.
Masters’ Private Blockchain (Bloomberg)
Blythe Masters is actually proposing to set up some kind of private blockchain.
Big FIG hire at Credit Suisse (Reuters)
Credit Suisse hired a new head of its EMEA FIG group from Deutsche Bank
US Investment Banks Dominating (WSJ)
Why you must work in a US bank's M&A team, redux.
Pep talk at Jefferies: While many people find roller coasters fun, nobody enjoys watching stocks drop 10-20% in minutes, and then experiencing unprecedented and massive intra-day swings.
Nomura tried to force a senior electronic trader to resign after he invented an interesting product. He took the bank to court and has been reinstated.
Cost Cutting At BNP Paribas (Consultancy)
A reminder: BNP Paribas wants to cut costs in the CIB by 20% by 2019 AND to increase revenues.
Russian bank CEO makes employees line up in rows, walks among them to feel their energy.
Deloitte wants to hire 640 business psychologists.
Quote of the Day:
“I had a great salary, great accommodation, good food, good friends and was traveling all over the world, but there was always something pulling me back to this place. I could see people back home, friends and family, who were struggling, who were dying. It was devastating,” the McKinsey analyst who quit to herd goats.