Matt Levine, Columnist

JPMorgan's Chinese Napping Analyst Knew What's Up

It's easy to get confused about what makes a good investment banker but you can keep it simple. A good banker gets clients to give him money. This clarifies discussions of whether clients' children are "qualified" to work for banks.

December 9, 2013 at 4:46 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Investment banking is a business of relationships. Relationships are like quid pro quos but fuzzier: Rather than an exchange of "I give you Thing X, and you give me Thing Y," the deal is more like "oh you like Thing X? Here, have it, it looks great on you. Nonono, no charge, just happy to help." Then you go make a note of it in your spreadsheet, and your spreadsheet has a column for "expected return," and in that column you write, "he will give me Thing Y and Thing Z."1

The vagueness about whether and when and how much each gift will be reciprocated allows both parties to the relationship to believe that they are actually friends with each other rather than just arms'-length counterparties trying to rip each others' faces off. It also allows them to believe that they are ripping each others' faces off.