Morgan Stanley Shows Why Traders Are Winning Again
Dan Simkowitz, co-president of the US bank, coined a term that helps illuminate the industry’s recovery — Derivative-ization
Life moves fast in banking.
Photographer: Spencer Platt/Getty Images North America
“This is one of my new phrases,” Dan Simkowitz, co-president of Morgan Stanley, told an investor conference last week. “There's ‘derivative-ization’ – that’s not a real word but it's a Dan word – all around the world.”
Everyone hates a clunky neologism, but occasionally one clarifies something important, or names a force in business or finance. Simkowitz, who runs trading and investment banking at Morgan Stanley, did both. He was talking about the bank’s equities business, but his idea helps explain why the entire industry’s markets revenue has recovered from the long malaise it had fallen into in the years before 2020. It also shows how non-banks like Jane Street LLC and Citadel Securities have bloomed without eating into Wall Street’s income.