JP Morgan Chase 2015 Annual Report Download - page 37

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Rates trading. With the adoption of new
regulations, we anticipate that this market
will also continue to see increased volumes of
e-trading. As a result, we have developed auto-
mated pricing systems that can price swaps in
a fraction of a second on electronic platforms.
Our SEF (swap execution facility) aggregator
allows clients to see the best price available to
them across the global market of interest rate
swaps and “click to trade” via our platform on
an agency basis. This helps our clients execute
transactions via any channel they desire, on
a principal or agent basis. Today, over 50% of
our U.S. dollar swaps volume is traded and
processed electronically.
Commodities. Leveraging our FX capabilities,
we have developed a complete electronic
oering in precious and base metals. We
are also extending the same capabilities to
energy products, where we have executed
our first electronic trade in oil. We plan to
further extend our e-trading capabilities
across the commodities markets, including
agricultural products.
Derivatives processing. The implementation
of our strategic over-the-counter derivatives
processing platform has promoted a 30%
increase in portfolio volume and a more
than 50% decrease in cost per trade in four
years. The platform now settles $2.2 trillion
of derivative notionals each day and has
been instrumental in improving operational
Why are you still in the mortgage business?
That is a valid question. The mortgage busi-
ness can be volatile and has experienced
increasingly lower returns as new regula-
tions add both sizable costs and higher
capital requirements. In addition, it is not
just the cost of the new rules in origination
and servicing, it is the enormous complexity
of those new requirements that can lead
to problems and errors. It is now virtually
impossible not to make some mistakes – and
as you know, the price for making an error is
very high. So why do we want to stay in this
business? Here’s why:
delivery, control and client service, as demon-
strated by a more than 60% reduction in
cash settlement breaks and a 50% increase in
straight-through processing of equity deriva-
tives confirmations.
In all these cases, greater operational ecien-
cies and higher straight-through processing
drive lower costs and lead to happy clients.
We also continue to make investments in
research and the coverage of clients. A couple
of examples will suce:
Research platform. We continue our research
investments both in the quality of our
people and in the number of companies
and sectors we cover. In 2015, we expanded
our global equity research coverage to
more than 3,700 companies, the broadest
equity company coverage platform among
our competitors. With material increases
in the United States – we expanded sector
coverage in energy, banks, insurance and
industrials – and in China, we doubled our
A-share coverage.
Increased Investment Banking coverage. We are
actively recruiting and hiring senior bankers
in areas where we were either underpen-
etrated or where there has been incremental
secular growth, such as energy, technology,
healthcare and Greater China.
• Mortgages are important to our customers.
For most of our customers, their home is
the single largest purchase they will make
in their lifetime. More than that, it is an
emotional purchase – it is where they
are getting their start, raising a family or
maybe spending their retirement years.
As a bank that wants to build lifelong
relationships with its customers, we want
to be there for them at life’s most critical
junctures. Mortgages are important to our
customers, and we still believe that we
have the brand and scale to build a higher-
quality and less volatile mortgage business.
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