Stephen Flanagan’s career should be held up as the textbook example of the successful evolution of FX. Having come to banking in 1979 – he celebrates 40 years with JP Morgan next year (certainly one of the most tenured individuals in the bank we’re told) – his career evolved from the traditional, spot voice trader, to taking a lead role in the development of electronic trading at one of the industry’s premier FX firms.
Flanagan, an Executive Director in Global FX and Rates at JP Morgan in New York, is currently the Global FX G10 e-Commerce Risk Manager, coordinating global spreads and hedging risk in collaboration with the Automated Trading Strategies (ATS) team.?
He initially joined the bank in 1979, when it was Manufacturers Hanover Trust (MHT), in the International Letters of Credit department. In the early 1980s, he moved to the foreign exchange trading desk and began a long career trading the USD/JPY, rising to Head Spot Trader.
He did spend time away from JPM for a period, with stints at Mitsubishi Bank, Paine Webber, Credit Agricole, Erste Bank and Christiania Bank, before rejoining JP Morgan’s predecessor firm, Chase, in 1999. Flanagan joined the FX e-Commerce desk in 2003 and has been actively involved in FX electronic trading as the industry has grown.
In Flanagan’s telling, his arrival to FX was a rather unlikely one. When he joined Manny Hanny, having played varsity soccer in college, he was thrilled to see they had a soccer team that traveled to Europe each year to compete in an all MHT branch soccer cup. “One such trip to Luxembourg allowed me to network and meet the Head of Foreign Exchange, Thomas Devine,” he says. “It was a year later, in an interview for a position in trading in 1982, that I came face to face with Tom again and I got the job in FX trading.”
Flanagan says life has been full of coincidences – another one played out after accepting his most recent role. My grandfather was a big influence on my decision to steer my career into banking after college. He had often talked about the great depression and his early start into the insurance/real estate business in New York as a ‘runner of documents’ working at 44 Wall Street. I started my job as an FX trader in that same building.”
In 2003, JP Morgan’s clients began to opt for automated trading over voice trading and Steve’s manager, Claudia Jury (once an analyst on Steve’s spot desk – a fact he is proud to highlight), asked him to take a leap of faith into the future of currency trading and lead the bank’s risk management efforts.
“In those early days, auto-hedging was how fast my fingers were accessing the EBS/Reuters keyboards,” he quips. “This very quickly proved no long-term solution because as e-trading volumes began to surge, the fingers had a finite limit of how many keys could be hit in a day.”
When Eddie Wen, Managing Director, Macro Markets, joined JP Morgan in 2006, automation got into full swing. Wen quickly established the role of an e-Commerce Risk Manager whose role was to work closely with the developers and sales desk in forming one cohesive, global team.
“I have a great admiration for my managers’ vision of eFX market evolution,” says Flanagan. “They combined the battle tested skill sets of voice trading with a world class group of developers. This collaboration has enabled us to grow and deliver a world class franchise to our clients and is something I am extremely proud to have played a part in.”
“Change is a constant in our space and there is always something new to learn,” he adds. “Loving what you do has made the decades just fly by. As with so many of us out of that era, I still awake at 4:30am and immediately look at market levels. It seems like just yesterday finding that spot in the house where the long antenna of the PDQ Telerate updated best, or figuring out how to turn off the vibrate mode of the Reuters pagers from keeping me up all night on every news update. I remember my chief dealer telling me, ‘That idea you had to sell USD/JPY on Friday, September 20, 1985 would have been a good idea’ when I came to work on Monday (Plaza Accord announcement), ‘if only you had gotten that idea – to market – to execute’. On reflection, I have spent all these years realising that having a good idea is easy, getting it to market in a timely manner is key to the idea’s success. Today it’s not about the seconds or milliseconds, but microseconds, and I love the change and the ability to reinvent myself on a daily basis.”
Wen, who joined the bank in 2006 to oversee the e-commerce business, recalls, “I was introduced to Steve on my first day. I remember him telling me about the way trading used to be, and how it was very different to the way it is today. He was frustrated about how things worked – he long recognised and believed in the vision of e-trading. I wanted someone on the spot desk to have responsibility for overseeing the risk on the e-trading desk – and today, he’s piloting the most progressive, modernised, e-trading business on the Street.”
“Steve is passionate about the business and is dedicated to the team. He works very well with the youngest on the desk – it’s not about age – it’s a mindset. Steve has truly transformed himself over the years. He proves that if you have the vision to adapt and change, you can do very well with disruptive technologies. A lot of the older traders have been displaced for various reasons, but it talks to Steve’s ability to embrace change, which is the hallmark of success,” Wen adds.
Wen points out that Flanagan’s ability to be highly adaptive in a fast-changing industry highlights how e-trading is not much different from traditional trading – it just manifests in shorter timeframes. “The concept and competitiveness of the business we do hasn’t changed, but how we use information and process has,” he adds. “Steve has made tremendous contributions and advancements to our industry and truly helped put JPM on the map.”
“People think e-trading takes over jobs – but Steve instead saw it as a great opportunity by putting more business through e-channels and evolving our business. The key was his open-mindedness – he isn’t threatened by change, he sees the benefits. He has undergone a remarkable transformation that is really quite unique,” Wen adds.
Jury, Managing Director and Co-Head, Currencies and Emerging Markets at JP Morgan and a Profit & Loss Hall of Fame 2011 inductee, echoes Wen’s sentiments on Steve’s ability to reinvent himself. “Steve has always embraced technology, which he continues to do, and has been a huge part of this team,” she says.
On a personal level, having started her banking career under Flanagan’s wing, Jury says he always took an interest in her career development and continues to do so. “Steve likes to mentor people – that’s what’s great about him – he’s also a good sounding board, which speaks to his work ethic and vision. He’s really the elder statesman of our business. Old and young both respect him, which is rare on the trading floor – that expertise and respect,” Jury says. “The other great thing is that he resonates with all individuals – from the most sophisticated technologists to the interns – he can dial up or down.”
With nearly 40 years in FX, Flanagan has a lot of fans.
“I met Steve in the FX markets over 20 years ago, when yours and mines were the main vernacular. His personality and professionalism has made him a staple in FX markets.
“Steve has adapted to the changing FX market landscape better than anyone I know, and he continues to be a main component in the JPM e-business. Congratulations Steve!” – Fulinda Rouse, Profit & Loss Hall of Fame 2013
“Steve Flanagan makes being ‘old fashioned’ cool. Steve is one of the unique individuals who has been able to transfer old fashioned risk management and trading into the new world of electronic trading. Without his expertise and input, the market would not be where it is today. When most people scamper away from risk, he embraces it as he grew up with it.” – Soren Haagensen, Profit & Loss Hall of Fame 2014
“I can think of no other FX market professional who is more deserving of a Hall of Fame award than Steve Flanagan. Steve is both a distinguished veteran and a pioneer in our industry. I have been lucky enough to interact with him professionally and personally throughout his illustrious career as a banker in FX trading. Steve’s wealth of experience, drive and vision led to his important contributions to the evolution of institutional FX trading. Throughout his years as the Global e-FX Trading Risk Manager at JP Morgan, he has had a solid grasp of the latest developments and new ideas in the industry. He consistently and effectively mentors traders, salespeople and technologists. Steve’s work has created significant improvements in the performance and function of the global FX trading market. He is the consummate professional, and one of the greatest guys I have had the pleasure to know.” – Marjorie Brown
“I don’t know exactly how long I’ve known Steve Flanagan, but it’s been a while. He was a phone trader and I was a voice broker and it seems so long ago now. Since then we have both moved on to somewhat more modern versions of our previous roles, with a few stops along the way. I will leave it to his teammates and colleagues to discuss his trading capabilities, his business acumen, his knowledge of the FX market and his many contributions that have been instrumental in the rise of JPMorgan Chase to the top of so many FX ‘Bests’ lists. I will instead simply speak of the quality of the man being honoured today. Ask anyone who knows Steve and what you will no doubt hear are some of the following descriptions: ‘great guy’, ‘total gentleman’, ‘true professional’, ‘top quality’, ‘wonderful person’, ‘genuine’ and on and on. To my experience, Steve is honest and straightforward and can tell you the truth (like it or not) without being mean or disrespectful. A straight shooter with a soft voice and a kind word. Qualities that are too often missing in today’s world. Steve is a family man who does the right thing, at home and in the trading room. He is a class act and a credit to our industry. It is a pleasure and a privilege to know Steve and to welcome him into the Profit & Loss Hall of Fame. Congratulations Steve, on an honour that is well-deserved!” – Jack Linker, Profit & Loss Hall of Fame 2015
“Having met Steve when I first began reporting on the FX industry nearly 30 years ago at a Forex USA event – likely in some exotic location – he became a market friend from day one. All these years later, to see him at the top of his game at a bank he’s devoted so many years to, speaks volumes to the professional that he is, and his ability to evolve that is so crucial in this industry.” – Julie Ros, Profit & Loss