Morning Coffee: The scary story of the Deutsche Bank trader let go before bonus day. Goldman goes Github
As Deutsche Bank grapples with its potential merger with Commerzbank and Unicredit reportedly lurks on the sidelines waiting to pounce on Commerz if it all goes wrong, a new threat to traders at Deutsche and everywhere else has emerged – the vagaries of ‘market color’ and the sharing thereof.
For bank traders who are trying to impress clients with their knowledge of the markets and make introductory chat, snippets of market color are the equivalent of asking “How are you?” before moving onto other more important things. However, in today’s febrile regulatory environment idle chatter is less innocuous than it used to be.
Tian Zeng, a senior credit-index trader at Deutsche Bank in New York, has discovered this to his detriment. Bloomberg reports that Deutsche dismissed Zeng ‘days before’ the German bank announced its 2018 bonuses after discovering that he’d been chatting to clients about a trade carried out by the credit swaps desk at Credit Suisse.
While this sounds more than unfortunate for Zeng, it’s also a shot across the bows for the entire trading community. By disclosing the identity of a counterparty on a trade to another firm, Zeng reportedly breached Deutsche Bank’s rules. If Zeng can be dismissed for doing this, so can other traders at Deutsche. And if Deutsche can dismissing traders for chatting about what other banks have been up to, so can other banks.
Bloomberg notes that banks are increasingly showing 'zero tolerance' for anything perceived as breaching their controls. Zeng's broker record shows that he violated Deutsche's policies “with respect to confidentiality and external third-party communications.” In future, traders might want to talk about the weather or the football instead.
Separately, Goldman Sachs is planning to release some of its secret SecDB risk and pricing code to Github. Goldman's been putting code on Github for at least two years, but The Wall Street Journal says the code that's coming is a bit special: it will allow users to interact directly with SecDB's new web application - Marquee, including data feeds, pricing engines and other tools. Alongside this, the bank is offering $100k in annual funding for engineers to build new applications using the bank’s code.
Unicredit wants to 'amass a sizeable stake in Commerzbank' and then merge it with HypoVereinsbank. The combined bank would be based in Germany. Unicredit has been mulling this for several years. (Financial Times)
Commerzbank's management board may decide whether to go with Deutsche Bank next Tuesday. (Bloomberg)
Commerzbank wants a quick decision on the merger. Deutsche Bank wants more time. (Reuters)
Nomura cut most of its Singapore equities team. (Bloomberg)
Anthony Abenante has been hiring at Credit Suisse's electronic trading business. He recruited Chris Rice from State Street as global head of execution strategy. (Business Insider)
Zeina Bain, one of Carlyle’s most senior female executives, left on Friday. Her exit comes as Carlyle is close to completing fundraising for a new European flagship fund. It seems Carlyle wanted a shakeup. (Financial Times)
Barclays hired Simon Denny, who was head of corporate finance at Deutsche Bank in South Africa. (Financial News)
Goldman Sachs and JPMorgan are chasing mid-market deals in the U.S.. 'Some banks are positioning the middle market as a way for younger bankers to prove themselves.' (Wall Street Journal)
Eight hedge funds started in Tokyo in the past 12 months. (Bloomberg)
Randy Gelber, the former head of telecom, media and technology investment banking for Asia Pacific at UBS in Hong Kong, will start later this month at Epic Games Inc - the game design company that developed Fortnite. (Bloomberg)
54% of staff at Google are white. 40% are Asian. (Bloomberg)
If the Labour Party gains power in the UK it wants to create a National Investment Bank, supported by a network of 12 Regional Development Banks. (Independent)
JPMorgan Chase and BNP Paribas have almost reversed all their post-crisis job cuts. Goldman Sachs and Credit Suisse have kept their staffing levels pretty consistent since the crisis. Wells Fargo has done the least trimming. (American Banker)
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