The trend towards US dominance is particularly acute in investment banking, where JPMorgan is now the top revenue generator in Europe, as well as globally.
So exploration of a link between Deutsche Bank and UBS to bolster both firms by exploiting their relative strengths in fixed income trading and equities had a clear logic.
A full-blown merger between the two firms has been explored before, and numerous UBS staff with an equities background – led by co-head of investment banking Rob Karofsky – previously worked at Deutsche, so there was a shared familiarity with the two business models.
UBS adopted a light presence in debt sales and trading after its 2012 restructuring, while Deutsche remains the biggest European bank by fixed income revenue, despite loss of market share amid relentless management upheaval.
Bankers regularly joke that attempting to reach consensus across a range of financial institutions is like herding cats
Even during its recent convulsions, Deutsche still generated €2.83 billion of fixed income revenue in the first half of 2019, or the equivalent of $3.14 billion.
