IFR Review of the Year 2008
Never before in the long history of IFR awards has one bank been so dominant. In what is our equivalent of a “Titanic at the Oscars” moment.
JP Morgan has won a significant proportion of our awards this year. Its DCM, ECM, structured equity, derivatives, securitisation and leveraged finance businesses have won global awards. Other parts of its business have done well in the regional categories.
Truth be told, that level of dominance makes us nervous. It could be taken to suggest that IFR has fallen for this year’s conventional media wisdom: that JP Morgan bankers in general – and Jamie Dimon in particular – are superhuman.
In fact, the bank wasn’t especially insightful about the coming of the crisis. JPM is where it is not because of some Eureka moment that convinced it to stay away from sub-prime mortgages, from SIVs, or from obscure structured finance products, but because its senior bankers stayed true to old-fashioned virtues like making sure the firm got paid for the risks it took.
And, just as importantly, they stuck to their guns despite the growing pressure to follow the herd – particularly as the herd seemed for a time to be winning.
It is also true that when IFR journalists looked at who had done the best deals in a particular asset class, who had done the most deals and who had continued to trade when others weren’t even answering the phone, the answer more often than not was bankers working for JP Morgan.
As we go into 2009, after 18 months of financial crisis, it is undeniable that the shape of the industry that IFR writes about has changed like never before. Some banks have fallen by the wayside – along with many bankers. Others (many of them) have only survived thanks to government support.
Clearly there are lessons to be learned. For those working in the banking industry, the obvious one can be drawn from JPM’s performance this year: the more banking has changed – with new products, clever technology and the like – the more it has stayed the same. Old-fashioned virtues like return-discipline and good credit judgements still matter; knowing your clients still pays dividends; and a strong balance sheet will see an institution through the crises that are an inevitable part of banking.
The rest of investment industry needs to get back on its game quickly. Otherwise JPM will be out of sight.
