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Morning Coffee: J.P. Morgan humble brags over competitors. The MF Global mess finally comes to a close

The London headquarters of J.P. Morgan Chase

While some banks posted disappointing results last year, J.P. Morgan wasn’t one of them. Looking at Wall Street deal-making revenue, it earned the most in fees in global investment banking, U.S. investment banking and investment banking in Europe, the Middle East and Africa. Other categories in which J.P. Morgan finished the year on top of the revenue table include debt capital markets, equity capital markets and syndicated loans, according to Dealogic.

Viswas Raghavan, J.P. Morgan’s London-based head of banking for EMEA, was quick to mention to Financial News that it was only the fourth time in twenty years that the top ranking bank in EMEA has led the fee league table by more than a percentage point of market share. While that could be interpreted as trolling his competitors, he did say that the bank’s lead will be difficult to hold on to, citing the “extremely competitive banking market.”

J.P Morgan rose from second place in the EMEA revenue rankings for M&A and equity capital markets in 2015 to first in both products last year, and jumped from third place to first in syndicated loans fees.

Raghavan had been concerned about tough macroeconomic conditions heading into 2016, which he said made J.P. Morgan’s ability to pick up business in a challenging market that much sweeter.

“The wallet itself is unlikely to grow, so the question for banks is how does your share [of wallet] evolve against an uncertain market backdrop?” Raghavan told FN. “To me, that measure of breaking away from the pack is key. The undercurrent is very much the shareholder-value-added and return-on-equity dynamics of our business rapidly changing and it’s no surprise that everyone is looking closely at their model….

“You want a three-legged stool to sit comfortably for any period of time. If you’re purely dependent on one product, like M&A or ECM or fixed income alone, it can place you at a disadvantage when markets change and investor sentiment follows. The environment will continue to be fickle so you need to be less myopic around short-term gains and more focused on client relationships and the longer-term.”

Separately, Jon Corzine, the former New Jersey senator, governor and Goldman Sachs CEO, ran MF Global when it imploded in 2011 and lost more than $1bn in customer money. The Commodity Futures Trading Commission subsequently sued him for failing to “diligently supervise” the firm as it allegedly misused customer money to plug holes in MF Global’s own accounts, including an overdraft from its J.P. Morgan Chase account.

The disappearance of the money from MF Global unnerved the futures industry and raised broader concerns about the safety of customer funds across Wall Street, according to the New York Times.

Almost six years later, the case is finally closed. Corzine must pay $5m out of his own pocket (rather than being covered by insurance) as part of the settlement agreement with the CFTC. The regulator also imposed a lifetime ban from the futures industry on Corzine, although he can still trade other types of securities.


Big winners from last year – executives from SkyBridge Capital, Parnassus Investments and Goldman Sachs – offer insights into how they did it and what they expect in 2017. (New York Times)

President-elect Donald Trump’s debts are held by Wall Street banks, mutual funds and other financial institutions, posing potential conflicts of interest for the incoming administration. (WSJ)

Trump and his chief strategist, Steve Bannon, are still opposed to the mega-merger between AT&T and Time Warner. (Bloomberg)

Occupy Wall Street redux? About 40 protesters entered the lobby of Goldman Sachs’s New York headquarters waving signs and yelling and were allegedly ejected physically. (Bloomberg)

Deutsche Bank tapped compliance executive Philippe Vollot to become the global head of financial crime-fighting, replacing Peter Hazlewood, who is getting phased out after just six months on the job. (WSJ)

Ed Budd, the chief digital officer in the global transaction banking division at Deutsche Bank, runs a farm during the weekend (Financial News)

To woo JPMorgan, France is going to have to make a banking career as terrifyingly tenuous in Paris as it is in London. (Dealbreaker)

U.K. Prime Minister Theresa May sent her two most senior aides on a secret trip to the U.S. in an attempt to thaw her administration’s icy relationship with Trump. (Bloomberg)

Why do human fund managers still exist in the age of automation? Unfortunately, there is very little economic rationale for their existence. (TheStreet)

Crispin Odey’s overly bearish main hedge fund sank 49.5% last year, the worst annual decline since it began trading in 1992. (Bloomberg)

Blackstone is betting big on music. (New York Times)

A senior Barclays executive has been called in for questioning in a Libor probe. (FT)

This laundry list of black-swan threats is keeping Barclays analysts up at night. (Bloomberg)

Women perceived to have “resting bitch face,” or RBF, tend to have strong communication skills that will help them rise to the top. (Quartz)

As the world’s best business schools get more selective, would you make the cut? (World Economic Forum)

Believing in predictions allows people to overlook their own ignorance, discount the role of randomness and generally overestimate their own skills, creating a comforting illusion. (Bloomberg)

Photo credit: JoeDunckley/GettyImages

AUTHORDan Butcher US Editor

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