Forex bods at investment banks are ready; forex investors have braced themselves. It’s that time of year when sales people ring up their clients to ask them to vote in the Euromoney FX poll — the only industry standard for measuring how much FX volume the banks do and who comes out on top. Everyone who’s anyone is taking part.
Well, until now. JPMorgan has decided that it is no longer playing ball, because its clients are fed up with being asked to vote, the bank says. Here is the letter the bank just sent out today to all its clients, explaining its terrible sacrifice:
Dear foreign exchange clients,
This is the time of year when most banks begin asking for your vote in Euromoney’s annual FX survey. We’re not going to.
Surveys can certainly provide helpful insights and we have always admired Euromoney for taking the lead in trying to gauge volumes in the FX market. After speaking to many of our clients, however, what is clear to us is that the annual poll has become too time-consuming with no tangible benefit to them. For many of our clients, internal policies and compliance procedures restrict them from voting anyway. We’ve listened and, starting this year, we will not canvass you for support.
As a consequence, it is likely that we will begin to fall down the rankings. We understand that, and accept it. We’ll be devoting more time to business that really matters – yours.
Foreign exchange is a critical component of our overall offering at J.P. Morgan. Despite challenging economic conditions over the past few years, we have invested heavily in our FX business and continued our expansion in corporate banking. This has enabled us to provide foreign exchange, cash management, global custody, trade finance and other services to more clients and more geographies than ever before.
We look forward to being your reliable partner again this year, regardless of market conditions. Here’s to a successful 2013.
A cynic would say that’s because JPMorgan knew it wouldn’t do as well this year. Last year, it came sixth in the poll with improved market share on the year before. In fact, there’s little evidence the bank is underperforming relative its peers. Everyone had a rubbish year in 2012 in FX. Data from Coalition found that revenues slid 23 per cent in the first three quarters of the year compared to the same time period in 2011. While very few banks break out their FX revenues, word is that JPMorgan saw “only” single digit falls last year.
The more likely reason is that investors are genuinely cheesed off at having to vote in this poll. Stories of
invented fictional optimistic votes abound. Some bankers say that clients simply ask how much volume the bank wants them to declare, rather than how much they actually did with the bank.
Meanwhile, over at Citi, the number two bank last year in the poll, traders are being handed out specially made Euromoney t-shirts to get them into the spirit of the poll. Other banks have just gone straight for spirits, so we’re not sure how the t-shirt will weigh up.
This kind of thing isn’t new of course and we wonder, based on reports of rather lavish gifts in the past, if survey incentives might not be quite a handy indicator. We feel an index coming on…
Euromoney results page – Euromoney.com
Presenting…. the totally exciting Euromoney FX survey 2012 – FT Alphaville