It's one of the oldest debates within banks derivatives groups: how much should firms invest in flow trading of plain-vanilla interest-rate, currency, credit and commodity derivatives and how much in devising highly structured, customized trades that bring high margins. Different firms have struck this balance differently. Most obviously Chase was widely recognized as the biggest flow monster in the derivatives markets, particularly interest-rate swaps, while JPMorgan was more renowned for high-margin, complex trades. When the two banks merged, customers and competitors wondered which philosophy would win out at two of the leading banks in the derivatives markets. In Euromoney's last survey of corporate treasurers in September 2000, JPMorgan had ranked as number one for overall risk management, while Chase, the great trading house, was top-ranked by other derivatives firms.
JPMorgan would argue that it has combined the best of both worlds, but integration has been painful and when a large sales group left the firm in North America it suggested that all was not well.
The other leading firm that can lay a strong claim to embracing both flow and structure across all products and regions is Deutsche Bank. From the very beginning of the build-up of its global markets business under Edson Mitchell from 1996, derivatives were at the heart of its interest rate, equity and credit businesses.