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Trading Slump Deepens: It’s as If JPMorgan and Goldman Vanished

  • Almost $40 billion has disappeared from banks’ markets units
  • More competitors with new technology sense an opening
Wall Street near the New York Stock Exchange.

Wall Street near the New York Stock Exchange.

Photographer: Michael Nagle/Bloomberg

Almost 20 years ago, when Susan Estes was running Deutsche Bank AG’s fixed-income desk in New York, she’d field calls from clients looking to put on $4 billion spread trades in the U.S. Treasury market.

Plenty has advanced from those days. Trades don’t require a phone call anymore and are executed faster than ever, and the Treasury market itself is four times as big as it was. But one key element has regressed: Banks’ willingness to take on risks of that size. To get the same rate as Estes would’ve charged on that $4 billion trade, clients today could only pull off $250 million, she said.