Awards for Excellence 2011: Best Global flow house
Consistent ability to offer liquidity in times of market turbulence across all asset classes has set Deutsche Bank apart from rivals.
Best Global flow house: Deutsche Bank
Also nominated: Barclays Capital and HSBC
The flow business – sales and trading in a broad range of asset classes including rates, credit, equities, commodities and foreign exchange – is now firmly established as one of the cornerstones of global markets franchises. It has become their bread and butter.
Defining its characteristics, though, can be a tricky exercise. Flow can mean different things in different market conditions. For instance in 2010, the inaugural year for this award, the financial markets were in the midst of normalizing – which generally meant rallying – thanks to some generous liquidity assistance from the world’s main central banks. However, the past 12 months have been quite different. Banks’ flow models have been tested by a series of mini crises, such as a southern European debt crisis, which has seeped into the banking system; political upheaval in the Middle East; and a natural disaster in Japan. Simply providing tight bid-offer spreads wasn’t the way to garner flow business or make revenues.
Deutsche Bank proved its mettle amid the re-emergence of market contagion by offering liquidity of a different sort as the European sovereign crisis tore its way around the periphery of the eurozone, while its now perennial leading FX platform stood up to the challenge when the dollar-yen rate collapsed to record lows in the wake of Japan’s earthquake and tsunami, when some of its closest rivals temporarily withdrew from market-making.