Some fixed income traders at Bank of America likely weren’t rejoicing back in 2016 when Ashok Krishnan was promoted to global head of electronic trading. Krishnan, who had previously overseen electronic trading in equities, suddenly had reach over fixed income securities as well. His ascension all but predicted that trading in markets like bonds and currencies – asset classes that many believed still required a human touch – would face the realities of automation.
In an interview with Bloomberg, Krishnan acknowledges that his colleagues took some time and convincing to come around to automated trading platforms, which started in equities but are now being used to buy and sell more complex fixed income products. In fact, Krishnan said that some of his Bank of America co-workers barely acknowledged him in the hallways. Traders had argued that clients wouldn’t embrace electronic platforms for certain transactions that they felt still required their expertise – and, of course, ensured their employability.
Like others in his role at rival banks, Krishnan saw a different reality. “If you don’t do this, your P&L goes down because the client just does business somewhere else,” he said. The bank listened to him rather than to its traders and today Krishnan is busy rolling out his systems across the bank.
Rivals have been following suit. Last June, Morgan Stanley hired KCG Europe’s Phil Allison to lead the automation of its fixed-income trading business, something CEO James Gorman called a “major priority” after seeing how digitized stock trading helped vault Morgan Stanley up to the top of the league tables. Like Krishnan, Allison too had a background in equities. He's also one of a new breed of manager who's equally happy managing programmers as markets professionals. “I’ve managed large groups of people, all the way from high-touch sales traders through to heavy C++ developers,” he told Bloomberg.
Of course, “transitioning” usually comes with a human cost. Front-office headcount at the 12 biggest investment banks has fallen by 11% since 2013, according to Coalition. Most of the carnage has hit trading floors. You can see why some people at Bank of America may have looked the other way when Krishnan was strolling the hallways. You can also see why they might be regretting that now.
Elsewhere, Harvard researchers have found the key to making meaningless small talk without the other person wishing they were somewhere else: asking lots of questions. The study found a direct correlation between asking follow-up questions and being well-liked. However, a second question can only be asked after the first one elicits a meaningful response. That’s why “how are you?” is the “most useless” question one can ask around the water cooler. They’ll answer dishonestly and it suggests that you don’t care in the first place. Try anything else, and then pepper them with follow-ups.
Or you can just try to be genuine. But where’s the fun in that?
Goldman Sachs has cut 10 positions within its commodities trading unit as it seeks to further shrink the division that used to be one of its chief revenue producers. (Reuters)
Meanwhile, Morgan Stanley is slowly adding to its commodities sales and trading business, though the division’s chief, Nancy King, acknowledges the difficulty of making lateral hires while also promoting diversity due to the fact that the business is “very male dominated.” The bank has had to focus on developing young analysts in-house. (Business Insider)
Anne Dinning has rejoined the executive committee at hedge fund D.E. Shaw just two years after leaving the firm. One the most prominent women in quantitative finance, Dinning will "jointly" supervise the firm’s global asset management business, according to its website. Dinning first started with D.E. Shaw back in 1990. (FT)
Morgan Stanley has named Katherine Wetmur as its new international chief information officer. Wetmur will move from New York to London. (Financial News)
Following heavy public criticism from outside career experts, BNY Mellon is putting on hold a previously announced decision to ban staff from working from home. Some detractors said the move would be a detriment to working parents and could potentially harm the bank’s female staff. (Financial News)
U.S. regulators may have to go back to the drawing board after their initial plans to revise the Volcker rule were met with criticism from Wall Street lobbyists. (Bloomberg)
Hedge fund giant Citadel is shutting down its Aptigon stock unit and parting ways with the fund’s head, Eric Felder. Most of the unit’s money managers and their teams will join Citadel’s three other equities units. (Bloomberg)
There are rumors that Facebook CEO Mark Zuckerberg had a secret passageway built beneath his conference room in the event of an emergency. Facebook reportedly spends roughly $10 million a year protecting Zuckerberg. (Business Insider)
Deborah Leone, the chief operating officer of Goldman Sachs’ investment management division, is set to retire at the end of the month after three decades with the firm. (Reuters)
In a rather unusual move, hedge fund Hildene Capital Management told the billionaire family that controls OxyContin maker Purdue Pharma that it is no longer comfortable managing their money. The pharmaceutical firm privately held by the Sackler family is facing heavy scrutiny over its alleged role in the growing opioid crisis. Someone known by members of Hildene Capital reportedly suffered an opioid-related tragedy. (WSJ)
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