CREDIT TRADING IGNITED the investment banking recovery in the US in 2010, after several banks reported record profitability in underwriting and trading markets. While volatility should be good for dealers because it means better margins, volatility of the protracted, violent kind tends to expose opportunistic or short-term players. The period covered by the inaugural Euromoney credit survey is likely to be remembered as the year that the eurozone denied its systemic debt crisis, with regrettable results for bond yields, CDS spreads and risk appetite in general. With the prospect of Greek default, eurozone contagion and existential angst for the single currency on everyone’s minds, the time had come to separate the men from the boys.
The results of Euromoney’s first credit survey reveal the winners and losers of the first round of Europe’s own credit crisis, and they are the same three banks that triumphed in the rates survey in March. Rates leaders Barclays Capital, Deutsche Bank and JPMorgan are also the biggest dealers in the credit world.