“Smart, Adaptable and Fair”
The evolution of the foreign exchange industry has seen it shift from a largely voice-driven business into one dominated by technology, but that successful transition could not have taken place without people like Ian O’Flaherty to bridge the gap, bringing their wealth of experience to bear on increasingly complex issues. He is a passionate advocate for change, a man with a deep understanding of what makes the foreign exchange market work, and is not afraid to challenge the conventional wisdom. He is, in short, a valuable and rare commodity in the modern foreign exchange industry.
O’Flaherty joined Deutsche Bank in 1982 and only left in mid-2018 after a stellar career that spanned trading, sales and technology. As XTX Markets co-CEO Zar Amrolia, a member of the first class to be inducted into the Hall of Fame and former global head of FX at Deutsche Bank, observes, “Ian was a key member of the Deutsche Bank management team. With a deep background in voice trading he was critical to Deutsche Bank’s successful transition to an electronic client business often bridging the gap in understanding on both sides.”
That voice trading experience to which Amrolia refers started on the precious metals desk at Deutsche before O’Flaherty moved in the core FX space as a spot ECU trader – a market that needed a swift mind, no little risk appetite, and the ability to use a spreadsheet; how else was one to keep track of the many moving parts that made up the forerunner of the euro? And it is testament to the humility of the man that stories of the voice days are interspersed with (often very funny) tales of when it went horribly wrong!
It was his ability to build understanding on both sides of what was still a considerable divide between voice and ‘e’ at the start of the century, however, that highlights O’Flaherty’s value to the business. As Russell Lascala, currently global head of FX at Deutsche Bank says, “Ian O’Flaherty is a true legend of the FX market. He started his career as an FX spot trader and ended his 35-year tenure at DB as the head of Autobahn – the bank’s award-winning FX platform. This progression shows how acutely aware Ian is of FX industry developments and how successfully he has modelled his career to take advantage of these changes.
“Ian hired me into Deutsche back in 2003 and since then, we have both had many roles, but whenever I needed a balanced, independent view, I would always speak with Ian. He is smart, adaptable, and fair – this is his legacy as my boss and colleague.”
James Taylor, currently head of e-FX sales at BNY Mellon also worked with O’Flaherty at Deutsche Bank and he aptly summarises the man. “Ian brought trading acumen and common sense to the table when it came to the e-FX business. He had a great ability to translate market problems into ‘tech speak’ so that our developers knew what to deliver. Ian also brought credibility to the e-FX sales team and was a fantastic manager and mentor.”
As the industry has evolved, O’Flaherty has been – and indeed remains – a passionate advocate for the e-FICC business, a man of opinion, but always open to new ideas. No more so is this demonstrated than by the consulting roles he has taken on since leaving Deutsche – as one source who wishes to remain anonymous told Profit & Loss after O’Flaherty had done some work at their institution: “It was an immediate benefit to our business. Ian understood the issues we faced, listened to the stakeholders and then made recommendations that made sense, were implementable and improved our business threefold.”
Notwithstanding the skill set and experience O’Flaherty brings to any role, the aspect that always attracts the greatest attention is his character. Quite simply he builds loyalty amongst those who have worked with him, but also within the bank’s customers.
Niall Coffey first met O’Flaherty when he was a young trader at Allied Irish Banks, and maintained a close relationship with him through his tenure as chief dealer of the Federal Reserve Bank of New York and then as a portfolio manager at hedge funds Graham Capital and Millennium. Coffey is currently CEO of Avoca Global Advisors, but he still talks of his relationship with O’Flaherty with fondness.
“I was privileged to meet Ian O’Flaherty very early in my career, and I am very grateful for the time he invested in our relationship,” says Coffey. “At the time, I was a young trader at Allied Irish Bank in Dublin, fresh out of college, and trying to find my way in the foreign exchange markets. My early communications with Ian were over the legendary Reuters Dealing system with ‘DEUL’. I was struck by his willingness to provide his time, market perspective and competitive pricing to Allied Irish Bank and to try to support our business growth. Certainly, this was not the standard among the large bank foreign exchange desks at that time.
“Ian was, is, and likely always will be, the picture-perfect example of ‘relationship banking’ at its finest, a concept that was so popular in the late 1990s and early 2000s,” Coffey continues. “When I met Ian in person for the first time, I was amazed at his deep skill set and market knowledge. He also has a remarkable ability to communicate on sophisticated issues to all levels of clientele; be they sophisticated asset managers, large banks, small banks, hedge funds, corporations or central banks. He respects all people equally and will share his time with the most senior or junior person.
“As I got to know Ian more, he became an important source perspective as I started to advance my trading skills and market knowledge,” Coffey adds. “The Deutsche Bank team that Ian managed was widely regarded and recognised as one of the biggest and most capable risk takers in the foreign exchange market. The perspective that Ian shared about his own trading became an important source of education for me about managing risk. My relationship with Ian and his colleagues at Deutsche Bank provided me a deeper level of awareness about the complex liquidity and risk management issues that can arise in the global foreign exchange markets.
Jorn “Luffe” Sodborg, head of e-business at Jyske Bank and former FX trader at Citi and First Chicago, also highlights the relationship ethic O’Flaherty exudes. “I have been so lucky to know Ian O’Flaherty for nearly 30 years, and even more luckily I’m happy and proud to be able to call Ian a friend,” he says. “Meeting Ian for the first time back in 1991 at the premises of Deutsche Bank in Houndsditch, seeking his expert advice about how to trade the ECU in the spot market, I quickly learned that he is a man of his word. Very reliable, always happy to assist with whatever problem or challenge you may have, no matter what role he has been holding over the years. It was the same no matter whether you were a counterpart, competitor or client.
“In my opinion Ian has added tremendous amount of value not only to Deutsche Bank and its clients, but also to our industry. He was an excellent spot FX trader, not afraid of risk but also as one of the front runners in the e-evolution, and one of the absolute cornerstones inside DB in the building of the bank’s e-offerings,” Luffe continues. “One of the few “old school” traders who successfully managed to develop with the market into a new era and in many ways a different ball game. Ian’s inclusion in the Hall of Fame is more than well deserved and those already in the HOF as well as those to be inducted in the future, will be proud to stand alongside Ian.”
Looking at O’Flaherty’s transition into the e-business, back to Coffey, who says, “Ian has a remarkably curious mindset, great attention to detail and is a very innovative and entrepreneurial person. It was no surprise to me that he was selected to a new leadership role to drive Deutsche Bank’s e-commerce trading initiative and the immense success of Autobahn over the years is a testament to his business savvy.
“My relationship with Ian advanced further in my next role as the chief dealer in the foreign exchange department at the Federal Reserve Bank of New York,” he continues. “Ian has a remarkable awareness of the ecosystem of the foreign exchange market and became a valuable source of information to policymakers as they sought to understand the changing FX liquidity and trading infrastructure. His technical expertise on such complex issues as referential liquidity pricing, liquiditytiering, last look, dark pools, high frequency trading, IT server redundancy and latency arbitrage, and e-commerce best practice proved highly valuable.
“Ian did not engage with these issues as mere fads or popular industry trends. Instead, Ian assessed each issue by principle and held it accountable to his high standards of best practice,” Coffey says. “This approach, I believe, was a critical source of Autobahn’s industry-leading success and its robust performance as the premier e-commerce foreign exchange trading platform during the global financial crisis. At that time, the Deutsche Bank Autobahn system could price, warehouse, distribute and manage a vastly higher level of market risk than its competitors, and, unlike its peers, it did so continuously throughout the global financial crisis. That successful performance is a testament to Ian’s enduring personal principle that a bank’s core responsibility is to stand by its client during their tough times, and when markets get rough.
“As my career progressed to the hedge fund world, my relationship with Ian continued to grow and prosper, and I saw first-hand how respected and regarded he is in the buy side community,” Coffey adds. “Interestingly, I became increasingly aware of Ian’s role as a mentor and leader. I saw first-hand how he enjoyed mentoring and teaching young people at Deutsche Bank, and I was not surprised to see many of these colleagues rise to prominent leadership roles.
“Ian loves foreign exchange and financial markets, and his contributions to the industry have been immense,” Coffey concludes. “His passion for innovation, his commitment to accountability and transparency and his principled approach to decision making make him a true leader. The foreign exchange industry owes him a depth of gratitude, and his great knowledge, passion, and focus will be invaluable in the years to come. Thank you, Ian for your incredible service, support, industry contributions and your friendship.”