Goldman Sachs just announced a big shake-up.

Jim Esposito, cohead of the global financing group, will join the securities division as chief strategy officer, the firm announced in an internal memo obtained by Business Insider.

Marc Nachmann, who had been cohead of the financing group, will become sole head. The financing group houses the bank's equity and debt capital markets activities.

"Jim has a deep understanding of our corporate clients and a successful track record in identifying effective capital market solutions to address client needs," reads the memo, which was signed by securities division coheads Isabelle Ealet, Pablo Salame, and Ashok Varadhan.

Esposito has been based in London, and ran the financing group in Europe, the Middle East, and Africa before his promotion to the global cohead role in 2014.

Denis Coleman, who had been head of credit finance in Europe, the Middle East, and Africa, will now become head of the financing group in the region. Michael Marsh will become head of leveraged finance in the region, according to separate memos seen by Business Insider and confirmed by a spokesman.

Separately, the firm announced in internal memos that Craig Packer, cohead of Leveraged Finance in the Americas, was retiring from the firm and that Christina Minnis and Vivek Bantwal will become coheads of the newly created Americas Credit Finance Group.

To get the must-read guide to the key issues at every major Wall Street bank, click here.

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Goldman Sachs just named Jim Esposito, who had been cohead of the bank's global-financing group, as chief strategy officer in the securities division on Wednesday.

The memo announcing the move, obtained by Business Insider and confirmed by a spokesman, highlights some of the challenges the bank faces in sales and trading.

The securities business is primarily made up of equity sales and trading, which has been doing great across Wall Street, and fixed income, which has had a terrible time lately.

Fixed income, currency, and commodities, or FICC, revenues at Goldman Sachs missed analyst expectations in the fourth quarter, coming in at $1.12 billion with $1.19 billion expected.

They were down 8% from the year-ago quarter, which the firm attributed to "significantly lower net revenues in commodities" and lower mortgages and currencies revenues.

The memo circulated on Wednesday to announce Esposito's appointment hints at a potential change in strategy (emphasis added):

We have a uniquely balanced and formidable presence in all products and regions across the division. At the same time, our industry is undergoing extraordinary change, driven by technology and regulation. These forces are reshaping market structure and pressuring many of our competitors to retrench or exit from businesses and regions. These developments are particularly profound in FICC, where the industry is experiencing both cyclical and secular pressures. As a result, we see significant opportunity to work more deeply and expansively with an even larger set of clients.

As a long tenured leader in the Investment Banking Division (IBD) and as global co-head of the Global Financing Group, Jim has a deep understanding of our corporate clients and a successful track record in identifying effective capital market solutions to address client needs. The ability to deliver the full range of products and services we offer to our clients is more valuable today than any other time that we can recall. Our mission is to adjust our practices and aspirations in a way that takes into account structural developments and our strong market position. Of course, we continue to focus intently on running all of our businesses efficiently and in a disciplined manner. We do so recognizing the reality of constrained resources in FICC.

It isn't just Goldman Sachs that has been suffering in fixed income, of course, and banks across Wall Street have been coming up with different strategies to adjust. Morgan Stanley responded to the headwinds by cutting 25% of its headcount in that division.

Goldman had generally indicated that it would stay the course in its FICC business and continue to maintain a presence while its rivals pull back.

CFO Harvey Schwartz presented a pretty bullish case for fixed income in a call following the release of Goldman Sachs' fourth-quarter earnings last month.

To get the must-read guide to the key issues at every major Wall Street bank, click here.

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A key witness in the trial of four men accused of profiting from insider trading made a telling statement on how investment bankers are viewed by their corporate clients.

Andrew Palmer, who was chief financial officer of insurance giant Legal & General during the 2008 financial crisis, described to a London court on Friday how he treated his brokers. 

Palmer said he retained two investment banks as corporate brokers for the company to advise on how to market the company to shareholders.

But he made sure to tell them only "six tenths" of all the information they might need to know about the company.

When they complained, Palmer said he would tell them (emphasis ours): "'I can't reveal everything to you, I don't know where you're going to be working next week.' On the whole, investment bankers are a fairly transient population."

Palmer had a working relationship with Martyn Dodgson, one of four men accused of illegally making £1 million ($1.4 million) from a series of trades on Legal and General stock as the financial crisis took hold in 2009. 

Palmer, and Legal & General, were clients of Dodgson as a broker at UBS, and the two stayed in touch as he moved from the Swiss bank to Morgan Stanley, Lehman Brothers before landing at Deutsche Bank in October 2008.

Last month the court heard how Legal & General bought a £1 billion stake in a collateralized debt obligation (CDO) in 2008 from Deutsche Bank.

A CDO is a portfolio of loans that pays the owner a regular income. In the deal, L&G would receive a stream of payments based on the interest from the loans, while Deutsche would retain the principal asset of the underlying loans, and bear the risk of the value of those loans changing.

As Lehman Brothers fell and the financial crisis got worse in the final months of 2008, the market value of L&G's CDO collapsed, leaving the insurer owing £155 million to Deutsche Bank, based on the side agreement.

L&G attempted to renegotiate the terms in January 2009. Deutsche Bank initially agreed, but demanded an £18 million fee at the last minute.

Dodgson, along with Andrew Hind, an accountant not employed at Deutsche, Benjamin Anderson, an independent day trader, and Iraj Parvizi, a former director at Aria Capital are accused of profiting from the inside information about L&G's financial troubles.

They all deny the charges.

The case has been dubbed Tabernula – Latin for little tavern – after the investigation's codename.

The court case started in January and is set to last at least 12 weeks at Southwark Crown Court in London.

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US bank stocks have plummeted this year, and everyone wants to know why.

Morgan Stanley is down 30% from a year ago, while Goldman Sachs is down 13%. Wells Fargo is down 11%.

Deutsche Bank analyst Matt O'Connor has taken a stab at why that is in a recent note.

He cites multiple factors, including a weakening economy, tightening monetary policy, and credit concerns.

Here's the logic:

1. The slowing economy

O'Connor pointed out that nominal gross domestic product rose only 3% year-on-year in the second half of 2015.

"One could argue we are already in or near a recession — or at least are in a recession like environment (not all recessions 'feel' like a recession after all)," O'Connor writes.

2. Tightening monetary policy

Tightening monetary policy — that is, higher interest rates — might actually not be a good thing for banks. O'Connor writes that banks may have benefited from quantitative easing and low interest rates.

"During periods of QE, bank stocks rose 2.8% on average per month (vs. just +0.2% during non QE periods). In aggregate, gains during QE accounted for 91% of all gains in the BKX since Mar 2009," he says.

3. Before the sell-off, bank stocks were not cheap

Before bank stocks peaked in July, they were trading above the historical long-term average "based on expectations that the overall economy was improving" and that "bank earnings would benefit disproportionately vs. the market as the economic growth accelerated."

So you could argue they had a lot farther to fall.

4. Banks aren't expected to earn as much this year

Earnings expectations for 2016 have dropped 10% in the past six months for market-sensitive banks, according to O'Connor.

The outlook could get even worse if we see weaker macroeconomic conditions — O'Connor says it could mean a risk of 20% to 25% in earnings per share if we see a slight downturn or mild recession. If we see a severe recession, which is unlikely, it could mean a potential downturn of 40% 50%.

5. Credit worries

In the fourth quarter, lending standards for banks tightened for the second consecutive quarter. Meanwhile, credit spreads are widening.

But O'Connor is not too bothered by concerns of credit quality.

"Within consumer lending, we've held the long time view that standards for mortgage and credit cards at the banks have been tight since the crisis," he writes. "As a result, we don't expect further tightening and wouldn't expect consumer credit to deteriorate much if there's a mild recession or near like recession in the US."

He does, however, see potential pressure in commercial and industrial loans, even outside the energy space.

6. It's normal for bank stocks to underperform the market at times like these

The whole market has seen a lot of volatility. And O'Connor's colleague David Bianco calculates that bank stocks have a beta of 2.3 times the S&P 500, which is in line with many other recent corrections. A beta is a measure of a stock's volatility compared with the volatility of the market as a whole.

To get the must-read guide to the key issues at every major Wall Street bank, click here.

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Chinese companies have been acquiring foreign companies at an unprecedented rate, and we're likely to see a lot more of it this year.

So far in 2016, General Electric has sold its appliances business to Qingdao-based Haier. China's Zoomlion made an unsolicited bid for heavy lifting equipment maker Terex Corporation, and property and investment firm Dalian Wanda announced a deal to buy a majority stake in Hollywood's Legendary Entertainment.

On Friday, a Chinese-led investor group announced it would buy the Chicago Stock Exchange. And then there's ChemChina's record-breaking deal for the Swiss seeds and pesticides group Syngenta, valued at $48 million according to Dealogic.

There have already been 82 Chinese outbound mergers and acquisitions deals announced this year, amounting to $73 billion in value, according to Dealogic. That's up from 55 deals worth $6.2 billion in the same period last year.

Last year was a record-breaker for Chinese outbound deals, with 607 deals valued at $112.5 billion in total. Just over one month in to 2015, and China is more than half way towards breaking that total. 

So what's going on?

One interpretation is that Chinese companies are simply hungry for growth as that country's economy slows, and they're feeding themselves by buying other companies.

"With the slowdown of the economy, Chinese corporates are increasingly looking to inorganic avenues to supplement their growth," Vikas Seth, head of emerging markets in the investment banking and capital markets department at Credit Suisse,  told Business Insider.

China's economic growth in 2015 was its slowest in 25 years.

But there's more to it than just growth. These are cross-border M&A deals and they're also about market access.

"Some of the primary motivations for cross-border acquisitions are access to new markets, brands, technologies, R&D capabilities and, in some cases, to products and supply chains that can be sold into a buyer's distribution networks within China," Seth said.

"We think this pace will be sustained since China is going through a remarkable transformation of its economy," he added.

Acquirers include state-owned enterprises, sovereign wealth funds, private corporations, and private equity funds.

In the case the deal for GE's appliance unit, Haier is getting both market access and access to GE's brand. With the Syngenta deal, ChemChina is getting technology and crucial research and development too.

In purchasing Legendary Entertainment, Dalian Wanda, which also owns movie theater chains in China, will get control over the content they're producing.

Challenges

Like any deal spree, this boom is good for Wall Street.

Last year investment bankers earned $558 million in revenue from Chinese outbound M&A deals, according to Dealogic. This year, that number is at $121 million to date.

But there are, of course, a number of challenge these deals will face — especially in the US.

M&A deals in the US are subject to are subject to scrutiny by the Committee on Foreign Investment in the United States, or CFIUS. It recently prevented the $3.3 billion sale of Philips' lighting business to a group of buyers in Asia. 

"I would be very surprised if CFIUS did not have an interest in taking a look at this deal," said Anne Salladin of law firm Stroock & Stroock, referring to the Chicago Stock Exchange deal.

There could also be cultural challenges when it comes to integrating Western-managed companies into Chinese businesses. Not to mention potential challenges valuing companies, given the market volatility we've seen recently.

Chinese companies need to have the full backing of the Chinese government in order to close foreign deals.

They need approval in order to get enough foreign exchange to pay for the acquisitions, something the government monitors closely. Also, many of the companies chasing after foreign deals are actually state-owned enterprises.

Given the recent volume of deals, however, it would appear that the Chinese government is supportive of the foreign buying spree. And that suggests there could be a lot more deal activity on the horizon. 

Andy Kiersz contributed to this story.

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Chinese companies have been acquiring foreign companies at an unprecedented rate, and we're likely to see a lot more of it this year.

So far in 2016, General Electric has sold its appliances business to Qingdao-based Haier. China's Zoomlion made an unsolicited bid for heavy-lifting-equipment maker Terex Corporation, and property and investment firm Dalian Wanda announced a deal to buy a majority stake in Hollywood's Legendary Entertainment.

On Friday, a Chinese-led investor group announced it would buy the Chicago Stock Exchange. And then there's ChemChina's record-breaking deal for the Swiss seeds and pesticides group Syngenta, valued at $48 million according to Dealogic.

There have already been 82 Chinese outbound mergers-and-acquisitions deals announced this year, amounting to $73 billion in value, according to Dealogic. That's up from 55 deals worth $6.2 billion in the same period last year.

Last year was a record-breaker for Chinese outbound deals, with 607 deals valued at $112.5 billion in total. Just over one month into 2016, and China is more than halfway to breaking that record.

So what's going on?

One interpretation is that Chinese companies are simply hungry for growth as that country's economy slows, and they're feeding themselves by buying other companies.

"With the slowdown of the economy, Chinese corporates are increasingly looking to inorganic avenues to supplement their growth," Vikas Seth, head of emerging markets in the investment-banking and capital-markets department at Credit Suisse, told Business Insider.

China's economic growth in 2015 was its slowest in 25 years.

But there's more to it than just growth. These are cross-border M&A deals and they're also about market access.

"Some of the primary motivations for cross-border acquisitions are access to new markets, brands, technologies, R&D capabilities and, in some cases, to products and supply chains that can be sold into a buyer's distribution networks within China," Seth said.

"We think this pace will be sustained since China is going through a remarkable transformation of its economy," he added.

Acquirers include state-owned enterprises, sovereign wealth funds, private corporations, and private-equity funds.

In the case the deal for GE's appliance unit, Haier is getting both market access and access to GE's brand. With the Syngenta deal, ChemChina is getting technology and crucial research and development, too.

In purchasing Legendary Entertainment, Dalian Wanda, which also owns movie-theater chains in China, will get control over the content they're producing.

Challenges

Like any deal spree, this boom is good for Wall Street.

Last year, investment bankers earned $558 million in revenue from Chinese outbound M&A deals, according to Dealogic. This year, that number is at $121 million to date.

But there are, of course, a number of challenge these deals will face — especially in the US.

M&A deals in the US are subject to scrutiny by the Committee on Foreign Investment in the United States, or CFIUS. It recently prevented the $3.3 billion sale of Philips' lighting business to a group of buyers in Asia.

"I would be very surprised if CFIUS did not have an interest in taking a look at this deal," said Anne Salladin of law firm Stroock & Stroock, referring to the Chicago Stock Exchange deal.

There could also be cultural challenges when it comes to integrating Western-managed companies into Chinese businesses. Not to mention potential challenges valuing companies, given the market volatility we've seen recently.

Chinese companies need to have the full backing of the Chinese government in order to close foreign deals.

They need approval in order to get enough foreign exchange to pay for the acquisitions, something the government monitors closely. Also, many of the companies chasing after foreign deals are actually state-owned enterprises.

Given the recent volume of deals, however, it would appear that the Chinese government is supportive of the foreign-buying spree. And that suggests there could be a lot more deal activity on the horizon.

Andy Kiersz contributed to this story.

SEE ALSO: Wall Street has had a terrible start to the year

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(Reuters) - Goldman Sachs Group Inc's chief executive officer signaled the U.S. bank could cut costs yet again as market turmoil, declining oil prices and concerns about Germany's Deutsche Bank AG have cratered the sector's shares this year.

"We can absolutely do a lot more on the cost side if we have to, especially now, when you have to deliver a return," CEO Lloyd Blankfein said on Tuesday while speaking at the Credit Suisse financial services forum in Miami.

"We take a particular and energetic look at continued cost cuts when revenues are stalled ... Necessity is the mother of invention."

Goldman, like its Wall Street peers, is grappling with low interest rates and strict regulations that have curbed profits in areas like fixed income trading.

Blankfein said the bank had already taken measures to cut headcount, which it has reduced 10 percent in its fixed income business since 2012.

Overall headcount at Goldman has increased 11 percent during that time to meet regulatory and compliance needs.

Around 25 percent of Goldman's employees are in lower-cost locations like Bengaluru, Salt Lake City and Dallas.

Goldman is also looking to develop more open source software to reduce payments to outside vendors.

Blankfein believes the global markets will improve, "but we aren't holding hands and singing kumbaya to get better," he said.

Shares of Goldman have declined 17 percent so far this year.

(Reporting by Olivia Oran in New York; Editing by Lisa Von Ahn)

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Deutsche Bank just announced plans for a big bond buyback.

The stock was up more than 9% following the news.

The plan is to buy about $5.4 billion in total — $3.4 billion in euro-denominated bonds and $2 billion in dollar-denominated bonds.

The tender is expected to be open for seven business days for the euro-denominated bonds and 20 business days for the dollar-denominated bonds.

"The bank is taking advantage of market conditions to repurchase this debt, lowering its debt burden at attractive prices," CFO Marcus Schenck said in a statement.

"By repurchasing this debt below its issue price, the bank realizes a profit. Deutsche Bank is also using its strong financial profile to provide liquidity to bond investors in challenging market conditions."

Deutsche Bank last month announced a loss of $7.4 billion for 2015.

The Frankfurt, Germany-based firm's share price reached record lows after the release, and on Monday the bank issued a statement to reassure investors.

The statement said the firm had enough capital to make the coupon payment owed to holders of contingent convertible debt, a type of bond that takes losses if the bank gets into trouble, in April.

Co-CEO John Cryan said in a memo to employees sent out Tuesday that the bank's capital position was "absolutely rock-solid."

"We took advantage of this strength to reassure the market of our capacity and commitment to pay coupons to investors who hold our Additional Tier 1 capital," Cryan said. "This type of instrument has been the subject of recent market concern."

As Business Insider's Myles Udland reported, contingent convertible, or coco, debt is effectively a junior bond the market is worried will be written down by the bank or, as is possible under the terms of these instruments, be converted to equity. More on that here.

As Business Insider's Ben Moshinsky noted, a bond buyback could make sense for Deutsche Bank: If the bonds are cheap on the secondary market, then buying them back would cost the firm less money in the long run than letting them mature and paying out the face value owed.

Here's a statement from Schenck:

Deutsche Bank today announced that it plans to repurchase some of its senior unsecured debt in the market. The Bank has a target acceptance volume of EUR 3 billion of euro-denominated debt and of USD 2 billon of dollar-denominated debt through a public tender offer.

From today, the tender is expected to be open for seven business days for the euro-denominated bonds and 20 business days for the USD-denominated bonds, subject to lower pricing for bonds tendered after the tenth day of this period.

The Bank is taking advantage of market conditions to repurchase this debt, lowering its debt burden at attractive prices. By repurchasing this debt below its issue price, the Bank realises a profit. Deutsche Bank is also using its strong financial profile to provide liquidity to bond investors in challenging market conditions. At the end of 2015, the Bank had around EUR 215 billion in liquidity reserves and our liquidity coverage ratio, which measures a bank’s ability to meet short-term liquidity needs, was around 120%.

Deutsche Bank is also making the most of a strong capital and risk position. Based on our published preliminary results, our Common Equity Tier 1 (CET1) ratio as at 1 January 2016 is 12.52% on a ‘phased-in’ basis – around 180 basis points, equivalent to around EUR 7 billion of Common Equity Tier 1 capital, higher than regulatory requirements for 2016. Levels of market risk are low by any historical measure and credit risk costs, at around 30 basis points of average loans in 2015, are below peers.

Deutsche Bank is able to repurchase these bonds without altering our 2016 funding plan – we have already completed EUR 4 billion of our 2016 full-year funding plan of up to EUR 35 billion.

This repurchase has no impact on the Bank’s capacity to service coupons on its Additional Tier 1 (AT1) capital during 2016 or 2017.

And here's the press release from Deutsche Bank:

Deutsche Bank (XETRA: DBKGn.DE/NYSE: DB) announces a public tender offer to purchase certain series of EUR and USD-denominated senior unsecured debt securities.

The Bank's strong liquidity position allows it to repurchase these securities without any corresponding change to its 2016 funding plan.

The EUR tender offer encompasses the following securities and has a target acceptance volume of EUR 3 bn.

ISIN
DE000DB7XHM0
DE000DB7XJB9
DE000DB7XJC7
DE000DB5DCS4
DE000DB7XJP9

The USD tender offer encompasses the following securities and has a target acceptance volume of USD 2 bn.

ISIN
US25152R2U64
US25152R2X04
US25152R2Y86
US25152RVS92
US25152RXA66
US25152RYD96
US25152RWY51
US25152CMN38

The tender offer is expected to be open for seven business days for the EUR denominated securities, and 20 business days for the USD denominated securities, subject to lower pricing for bonds tendered after day 10.

To get the must-read guide to the key issues at every major Wall Street bank, click here.

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If you graduated or are soon going to graduate as a business major, there are many reasons you might be interested in pursuing financial analyst roles. If you can handle the stressful hours, they are jobs that have a high median salaries and are expected to grow by 12% by 2024 according to the Bureau of Labor Statistics, a much faster growth rate than the national average for all professions. There's also a high opportunity for upward mobility, as many financial analyst jobs can lead to bigger and better gigs down the road, once you have experience under your belt.

If you’re trying to prepare for an eventual career in finance, but are still looking to round out your knowledge of the subject, Udemy is currently offering The Complete Financial Analyst Course that might be a perfect fit for you.

Through the course, you'll first go through the fundamentals of Excel, as essential a skill as there is in finance. Next, you’ll be introduced to the basics of finance: interest rates, loan calculations, time value of money, and present and future value of cash flows. You’ll start by learning to read and understand a company’s profit and loss statement, and by the end of the course you’ll be constructing them from scratch yourself.

This course normally runs for $295, but through the end of February you can get the course for just $19 by using the code “INSIDER229” at checkout. For anyone aspiring for a job in finance — be it a position in investment banking, mergers and acquisitions, or some other division — this course hopes to keep your skills sharp and potentially give you the edge over the competition when you get the interview for your dream job.

The Complete Financial Analyst Course, $19 (originally $295), available at Udemy. [94% off with the promo code INSIDER229]

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The financial-technology, or fintech, industry has exploded, and big banks are sitting up and paying attention.

Often, fintech companies like robo-advisers and financial-planning startups are seen as "out to crush" their more traditional counterparts.

But there's one important goal that companies in both industries share, and it's motivating them to work together: Helping Americans save more money.

"Everybody benefits if a broad base of Americans saves more and has access to more capital so they can build businesses," Maria Gotsch, the president and CEO at the Partnership Fund for New York City, told Business Insider.

Her organization partnered with the Department of Commerce and the financial-planning startup LearnVest to host a conference that brought some 40 fintech startups together with a handful of large financial institutions last week.

Participants included Secretary of Commerce Penny Pritzker, JPMorgan Asset Management CEO Mary Erdoes, Northwestern Mutual CEO John Schlifske, and folks from Goldman Sachs and MasterCard, among others.

"The economic benefits which will emerge from fintech are not restricted to the growth of the sector," Secretary Pritzker told participants. "Your success translates directly into the growth of businesses across all sectors, and the strength of our consumer base."

Traditional financial institutions, hampered by post-financial-crisis regulation and legacy technology, are struggling to do it alone. That's why it's in everybody's interests — even the Department of Commerce's — to help them partner with startups.

Partnerships

Partnership can take many forms. For large institutions, it might be mentorship relationships with startups, strategic-investment opportunities, or using technology as a customer of the firms.

In the case of life-insurance giant Northwestern Mutual, it meant acquiring LearnVest to enhance their digital platform for clients.

"We see LearnVest really serving as an innovation hub for Northwestern Mutual, so we're going to drive lots of experimentation and new thinking through LearnVest and see what takes," Northwestern Mutual's executive vice president, Tim Schaefer, told Business Insider.

It makes sense from the perspective of fintech companies too.

"Everyone wants to help consumers save more, save smarter, invest better," Jon Stein, CEO and founder of the robo-adviser Betterment, told Business Insider. "I think some of the big companies feel they just can't get there for technology reasons, for investment restrictions, for regulatory restrictions."

His company shares common problems with traditional investment firms — things like data portability and compliance constraints. Identifying and agreeing on specific issues, or pain points, to bring to regulators in Washington was a big topic of discussion at the conference.

A sea change

One potential case study they discussed is the intense regulation surrounding 401K clients, who are more expensive to serve than retail customers because of regulation. It's an issue that affects both large and small institutions — but together, they hope to make a little more headway.

"You've seen a sea change, where the big financial institutions are looking to us to help solve some of these big pain points," LearnVest CEO and founder Alexa von Tobel told Business Insider.

Other shared goals included getting fintech entrepreneurs better access to capital and getting all financial companies better access to data.

But the main objective all the participants agreed on was the need to help their customers save money.

"America's wallet needs more help," von Tobel said. "We need to help people save, help people understand the confusion, help people understand their financial plans, save more for retirement, avoid [making] big financial decisions without good guidance ... We need more innovation."

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The numbers are in, and it's official: Wall Street had a horrible 2015.

Poor trading results and low client activity in the second half of the year led to an overall drop in revenues for Wall Street banks.

That's according to the data-analytics company Coalition, which just released its annual index of investment bank performance.

They tracked performance in key business divisions at Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Societe Generale and UBS.

Fixed income divisions disappointed in particular, as corporate bond trading revenues fell more than 30%.

Jobs were lost too, with headcount down around 800. 

The bad news for Wall Street is that 2016 looks like it could be even worse. JPMorgan analyst Kian Abouhossein has forecast a 19% drop in fixed income revenues and a 16% drop in equities revenues in 2016 versus 2015. 

Here's the breakdown.

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Full-year revenues were down 3% from 2014 for Wall Street banks across the board, with a sharp drop in fixed income, currencies and commodities (FICC) revenues only partially offset by an increase in equities revenue.

Revenues came in at $160.2 billion for 2015, down from $164.6 billion in 2014 and $187.9 billion back in 2010.

Coalition attributed the disappointing results to poor trading results and low client activity in the second half of the year.

The nightmare fixed income division was down 9% for the year, with credit trading revenues down more than 30% to $12.4 billion.

Fixed income, currencies, and commodities revenues were down significantly, coming in at $69.9 billion for the year versus $76.7 billion for 2014.

Credit was the worst performing product in fixed income. Coalition said it was impacted by poor client activity, trading underperformance, and widening spreads. Distressed credit and CLOs performed the worst. 

What's notable is that 2015 was the third consecutive year in which FICC revenues declined.

They hit highs in 2010, at $109.1 billion, and 2012, at $102.7, but those highs don't appear to be coming back anytime soon.

Equities revenues were actually up for the year, coming in at $49.8 billion, led by increased revenues in equity derivatives and prime brokerage.

Equities revenues were up 10%, coming in at $49.8 billion versus $45.2 billion in 2014.

Equity derivatives and prime brokerage services performed particularly well in 2015, while futures and options declined marginally and cash equities showed mixed performance.

Asia outperformed regionally, especially in the first half of the year, according to Coalition.

Wall Street banks have had a tough start to the year.

Goldman Sachs bank analyst Richard Ramsden said in a note Monday that the first quarter could be the weakest in recent history for capital markets revenues.

He projected capital markets revenues will be down 15% year-on-year for the first quarter.

"The combination of higher volatility, wider credit spreads, lower equity valuations, and uncertainty around the trajectory of economic growth across the globe has created a very tough environment for the capital markets business to start the year," the note reads.

Ramsden also attributed it to slowing issuance and a tough comparison period. Capital markets revenues in the first quarter of 2015 were up 6% from the previous year.

He predicted a 17% decline in investment banking division revenues, a 13% drop in equities revenues, and a 15% decline in fixed income, currencies, and commodities revenues.

Several banks have begun downsizing their fixed income divisions and laying people off. Morgan Stanley, which Ramsden expects to report at 21% decline in FICC, reduced its headcount by 25% in that division.

Deutsche Bank is also laying off 75 traders in that division on Monday.

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JPMorgan CFO Marianne Lake says her firm is more than just a bank.

"We are a technology company," Lake said, speaking at JPMorgan's Investor Day on Tuesday.

JPMorgan Chase has a team of 40,000 technologists, including 18,000 developers "creating intellectual property," according to the firm.

It has a $9 billion technology budget, about a third of which is spent on investments. The firm also spends about $2 billion on security, including cybersecurity and proactive defense risk measures.

In a video aired at the Investor Day conference, the firm said it was the first US bank to use electricity, as well as the first to use ATMs and, later, online imaging to process checks.

JPMorgan is not the first global investment bank to refer to itself as a tech company.

Goldman Sachs CEO Lloyd Blankfein has repeatedly referred to his firm as a tech company.

Here's a snapshot from Lake's presentation:

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Daniel Pinto, CEO of JPMorgan's corporate and investment bank, just made a gloomy prediction for Wall Street.

He said that the firm's investment-banking revenues are forecast to be down 25% in the first quarter.

Markets revenues are down 20% year-on-year, Pinto said, speaking at JPMorgan's Investor Day conference.

Importantly, Pinto noted, the start to 2015 is a tough comparison period for markets revenues because the division saw an increase in flows during that period after the Swiss National Bank decided to unpeg the franc.

JPMorgan topped league tables in 2015 in terms of global revenue. Elsewhere in the same presentation, the firm said that its market business had outperformed those of its rivals over the past few years.

So when JPMorgan has a tough start to the year, the rest of Wall Street likely will, too.

In a recent note, Goldman Sachs analyst Richard Ramsden said that the first quarter could be the weakest in recent history for capital-markets revenues across the Street.

He projected that capital-markets revenues will be down 15% year-on-year for the first quarter.

Ramsden attributed that to a handful of factors, including higher market volatility, wider credit spreads, lower equity valuations, slowing issuance, a tough comparison period, and uncertainty around the trajectory of economic growth across the globe.

A number of other analysts had started forecasting disappointing first-quarter revenues in recent weeks. Still, a 20% decline in markets revenues and a 25% decline in investment-banking fees is worse than anyone had forecast. It's the scale that's really notable.

Morgan Stanley's global head of sales and trading, Ted Pick, gave a similar warning about the rough start to the year for Wall Street traders earlier this month.

"The question is going to be, with the animal spirits having sort of disappeared here and the classic risk taking mode, whether we're going to continue to see this gapping around, which I think will look more like recent sequential quarters than it would like the healthy first quarter we saw last year," he said, speaking at the Credit Suisse financial-services forum.

As Business Insider's Matt Turner pointed out, that comment is critical. The first quarter is typically the most important period of the year for trading desks, as asset managers move into new positions.

If that isn't happening, and the first quarter looks just like the third or fourth quarters, for example, then trading revenues are likely to come in down on the first quarter of last year.

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So you think you can survive the most rigorous investment-banking interviews unscathed?

Below are four of the most difficult questions (two technical and two behavioral) you may encounter as well as some sample responses to give you an idea of how to structure a great answer.

As you will see, these questions take mastery both of your personal story and of the technical side of finance.

These difficult investment-banking interview questions have hundreds of variations, so it's important that you don't just memorize scripted answers but actually understand the concepts behind them.

Without further ado …

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1. When should a company issue equity rather than debt to fund its operations?

• If the company feels its stock price is inflated, it would raise a large amount of capital relative to the percentage of ownership sold.

• If new projects the company plans on investing in may not produce immediate or consistent cash flows to make interest payments.

• If the company wants to adjust its capital structure or pay down debt.

• If the company's owners want the ability to sell off a portion of their ownership and monetize their investment.

Sample Response: "There are several reasons for issuing stock rather than debt. First, if a company believes its stock price is inflated, issuing stock can raise a lot of capital relative to the ownership sold. Second, if the projects to be funded may not generate predictable cash flows in the immediate future, the company would want to avoid the obligation of consistent coupon payments required by the issuance of debt. Issuing stock is also an effective way to adjust the debt/equity ratio of a company's capital structure or to monetize the owners' investment."

2. How would a $10 increase in depreciation expense affect each of the three financial statements?

Note: There are many forms of this question. An interviewer could ask how the statements are affected by a $20 decrease in inventory, or a $50 million capital expenditure project. Since you will not be able to memorize every possible variation, you must know how the changes in line items flow through the financial statements.

Break this question down into pieces:

1) Start with the Income Statement.

• • The $10 increase in depreciation is an expense, which therefore lowers operating profit by $10 and reduces taxes.
• • Taxes decrease by $10 x Tax Rate and net income decreases by $10 x (1–Tax Rate).
• • Assuming a 40% tax rate, the drop in net income will be $6 [$10 x (1–0.40)].

2) Next move to the Statement of Cash Flows.

• • The $6 reduction in net income reduces cash from operations by $6.
• • But depreciation is a noncash item, so it will increase cash from operations by $10 because you add back depreciation.
• • Ending cash is therefore increased by $4.

3) Now to the Balance Sheet.

• • Cash increases by $4.
• • PP&E decreases by $10 because of depreciation.
• • Overall assets fall by $6.
• • This needs to balance with the other side of the Balance Sheet; therefore, retained earnings will fall by $6 due to the drop in net income.

Sample Response:"Let's start with the Income Statement. The $10 increase in depreciation will be an expense and will reduce net income by $10 times (1–the tax rate). Assuming a 40% tax rate, this will mean a reduction in net income of 60% or $6. So $6 flows to cash from operations, where net income will be reduced by $6 but depreciation will increase by $10, resulting in an increase of ending cash by $4. Cash then flows onto the Balance Sheet, where it increases by $4, PP&E decreases by $10, and retained earnings decreases by $6, keeping everything in balance."

3. What do you think is the most important characteristic for this job?

Choose one of the following (or something similar) and be ready to explain why it's most important or how it makes a successful analyst.

• • Positive attitude
• • Drive and determination
• • Willingness to learn
• • Capacity for work
• • Efficient time management
• • Communication ability
• • Teamwork skills
• • Detail orientation

Finance is not rocket science at the junior levels. You will be doing relatively menial tasks that take a long time and can be boring. You will spend so much time staring at a computer screen that your vision will most likely deteriorate during your first year.

Show that you will bring a positive attitude when you walk through the door every morning and will get the job done right with a smile on your face, no matter what.

Sample Response. "There are a lot of traits that make a successful analyst, but the one that really stands out in my mind is positive attitude. According to the analysts I've talked to, the most difficult aspect of finance is the day-to-day grind and long hours. I think if I keep my head up and maintain a positive attitude while getting my work done, I will be successful. Most of the candidates you're interviewing are probably smart enough to do a good job. What I think makes a great analyst is someone smart who can also stay positive when the job becomes demanding. A person with this mentality gets the job done and is going to be easier to work with in team situations, which seem to be common in finance."

Boutique banks have had a good run recently.

In the past year, small shops like Centerview Partners and Robey Warshaw have taken the lead on deals like the Kraft-Heinz merger last March and more recently bids by Deutsche Boerse and the Intercontinental Exchange for the London Stock Exchange.

The conventional thinking on the rise of tiny banks is that it reflects the power of relationships that bankers like Blair Effron and Paul Taubman built over long careers at big Wall Street firms. They also promise a level of focus — working on only a handful of deals a year — that huge banks can't offer.

The Wall Street Journal's Liz Hoffman this week fleshed out another explanation for the rise of the boutiques — and it has less to do with those firms themselves than with a looming problem within their larger rivals.

Essentially, Hoffman reports, bigger banks are ceding major deals to the boutiques because, amid a takeover boom, they face too many conflicts of interest with other clients.

Sometimes that's because the bank's own reputational risk committee or other overseers of key relationships know to stay away from a potential client. A bank that values its relationship with a big client won't risk that by working for a rival.

But often it is the clients that make that decision.

One example Hoffman gave was JPMorgan, which the drugmaker Perrigo last year hired as an adviser to help dodge a takeover bid from Mylan. JPMorgan lost Perrigo's business after working on a separate deal — Allergan's sale of its generic drug unit to Teva — that in a convoluted way had a positive impact on Mylan. Perrigo wasn't pleased.

The fact that some industries have seen a lot of consolidation recently doesn't help the bigger banks, either. Hoffman writes that one thing companies look at when hiring advisers is the past work they've done, and that gets messier and messier as companies combine or compete for fewer assets.

Boutiques aren't quite so sprawled out, and they face less of these problems.

Read the full WSJ story here»

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Wall Street deal makers are having their worst quarter since the dark post-financial-crisis days of 2009.

Investment banks have earned $12.8 billion to date in equity, debt, loan, and advisory fees, down 36% from the first quarter of 2015, and the lowest total since the first quarter of 2009.

That's according to Dealogic, which just released its preliminary investment-banking review for the first quarter of 2016.

In the debt-capital-markets business, banks earned $4.1 billion in revenue, down 32% from last year, and the lowest since 2009. Specifically, high-yield bond revenue dropped 70% year-on-year, while investment-grade revenue fell 13%.

In the equity-capital markets (ECM), revenues came in at $2.3 billion, also the lowest since 2009. That's down 55% from last year — a drop that hasn't been seen since 2000/2001, when fees dropped 57%.

Within ECM, initial-public-offering revenue was also the lowest quarterly total since the first quarter of 2009, coming in at $336 million.

Syndicated-lending revenue was also down in the first quarter, coming in at $1.9 billion, a 30% decrease from 2015. Specifically, investment-grade loan revenue was down 50% year-over-year.

M&A revenue was down 24% year-over-year, coming in at $4.4 billion, while financial-sponsor-related revenue was down 46% at $1.8 billion. That, too, is the lowest quarterly total since the first quarter of 2009.

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We have new data on how Wall Street banks stack up in every business line, and there is one clear winner.

JPMorgan led the pack in 2015 for revenue across fixed income, equities, and banking, according to data-analytics company Coalition.

That bank made $22.7 billion.

It ranked No. 1 by revenues in investment banking, and within that equity-capital markets. It also placed first in fixed income, currencies, and commodities, and within that G10 rates, G10 foreign exchange, and securitization.

Goldman Sachs ranked second overall for the year, placing first in commodities, within the fixed-income, currencies, and commodities division. It also ranked first in cash equities and futures and options, within equities, and in mergers and acquisitions and equity-capital markets, within investment banking.

Citigroup and Bank of America Merrill Lynch tied for third place.

Here's the global ranking, plus the rankings broken down by region:

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JPMorgan is the clear winner in the global ranking, with a top score in traditional investment banking and fixed income, currencies, and commodities.

Broken down by region, JPMorgan led the pack in the Americas and Europe, the Middle East, and Africa, with $13 billion and $7 billion in revenues in each region, respectively. In Asia-Pacific, Deutsche Bank ranked first, with $3.3 billion.

By now it should come as no surprise that first-quarter results will be pretty horrendous for Wall Street.

Banks will begin reporting Q1 earnings in mid-April, and a chorus including Morgan Stanley's head of trading and the CEO of JPMorgan's investment bank has warned that it will be unusually weak.

The data-analytics firm Dealogic's preliminary Q1 results for investment-banking fees show the worst first quarter since the dark post-financial-crisis days of 2009.

According to Macquarie's banks analyst, David Konrad, "a perfect storm" of events has brought us to this point. Here's how he described it in a note on Wednesday:

We believe 1Q16 will likely be unusually weak owing to concerns over global growth (especially China), declining oil prices and concerns over potential growing use of negative rates around the world. These trends worked in concert to effectively shut down market activity in Jan and Feb and also placed pressure on asset managers (particularly hedge funds), causing many to de-lever.

That has resulted in an extremely weak initial-public-offering market, and volatility and choppy valuations have led to increased pressure on trading results.

Konrad expects shares of Morgan Stanley and Goldman Sachs to underperform in the short term, especially in trading, because of their exposure to asset managers and hedge funds, which have been deleveraging.

Those two banks also tend to be more exposed to credit and mortgage products in the fixed income, currencies, and commodities business.

JPMorgan, top-ranked bank for investment-banking revenue in 2015, is expected to continue to outperform its peers.

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It has been a miserable start to the year for Wall Street dealmakers.

Revenues from equity and debt deals and mergers and acquisitions have fallen off a cliff. 

Industry-wide global investment banking revenue is down 36% from the first quarter of last year. Revenues are down in pretty much every single business line.

And JPMorgan has taken home the biggest chunk of a shrinking pie, according to Dealogic's preliminary league tables for the first quarter. 

League tables are a contentious subject on Wall Street.

Banks use them when pitching for new business, and a good ranking means serious bragging rights. But the league table-data can also be sliced up to make a bank's performance look better (by narrowing the field very narrowly, for example).  

Though they're based on estimates, these tables are the broadest possible and a closely-watched indicator of who is up and who is down. 

Here's how the banks stacked up this time around.

JPMorgan tops the table for total investment banking revenues.

JPMorgan has a 8.1% market share and $1 billion in total revenues for the year to March 23. It is followed closely by rival Goldman Sachs, with $899 million and a 7.0% share. Bank of America was in third place, with $854 billion.

Global investment banking revenue was $12.8 billion for the period, down 36% compared to the first quarter of 2015.

JPMorgan tops the table for M&A too.

JPMorgan is top of the table for M&A too, with $511 million in revenues, narrowly ahead of Goldman Sachs in second, with $499 million. 

M&A revenue was a bright spot last year, but the market has slowed more recently. M&A fees are down 24% from the first year of 2015. M&A revenues across the industry stand at $4.4 billion, down from $5.8 billion.

And equity capital markets.

JPMorgan ranks top in equity capital markets too, ahead of Morgan Stanley and Goldman Sachs, which $187 million in fees. 

Total ECM fees are down more than 50%, dropping from $5.2 billion to $2.3 billion.