A decade ago JPMorgan Chase looked like a financial octopus: its tentacles reached into almost every part of the Wall Street money machine. But some of those tentacles are now being trimmed.
Take the tri-party repurchase (repo) market — the corner of modern finance where banks and others raise short-term loans backed by collateral while entities such as mutual funds use it to park their cash.
Until now, JPMorgan has been a linchpin of this $1.6tn sector, since it settled and cleared these deals, acting as a bridge between clients. Its only rival was the mighty Bank of New York Mellon. But a couple of weeks ago JPMorgan bankers revealed that they plan to withdraw from this market by the end of 2017 to focus on more profitable activities. This leaves the crucial tri-party repo sector almost exclusively in the hands of Bony; John Pierpont Morgan might be spinning in his grave.