Morning Coffee: Credit Suisse’s finest trading talent unwanted by UBS. Carlyle wants to build its investment bank

efinancialcareers.com:

It might be that only a small number of bankers will understand the true significance, but the end of an era is upon us. As part of the integration between UBS and Credit Suisse, UBS will switch off the Credit Suisse “Crossfinder” trading system.

It's a cautionary tale about how fragile even the greatest of franchises can be.  

If you remember dancing to “Dynamite” on a Friday night after the market closed, or went with a client to the premiere of Inception, you won’t need to be reminded – in its day, Crossfinder was one of the biggest “dark pools” in the equity market.  It allowed big institutions and hedge funds to electronically match trades with each other and get better prices than anyone was quoting on the stock exchanges.  It was part of a suite of Credit Suisse products collectively known as “AES” (Algorithmic Execution Services), which were at times so dominant that people actually wrote books about how difficult it was to compete against them.

A position like that ought to be very difficult to lose.  Trading is famously an industry where market share is self-reinforcing, and a system like Crossfinder ought to be the perfect example of that kind of economics; the more clients you can connect to the system, the more likely they are to find a match for their trades, and the more valuable the system is to them.  All you need to do is to take some of the profits you’re making and reinvest them into ensuring you’re staying ahead in the technological arms race to provide faster and more reliable connections.

It is indeed difficult to lose a top position but as has CS proven, it’s not impossible.  There were regulatory fines, which didn’t help, and the failures and losses elsewhere in the bank made it difficult for