JPMorgan Chase has sharply reduced the financing it provides to Jane Street, according to reporting by the Financial Times, as the secretive trading firm’s rapid expansion into the bond market brings it into increasingly direct competition with one of Wall Street’s most powerful banks.
The decision, taken last year, represents a significant shift in the relationship between the two financial groups. According to people familiar with the matter cited by the Financial Times, JPMorgan substantially curtailed lending to Jane Street for its bond-trading activities. The reduction represented roughly 5 per cent of Jane Street’s total fixed-income financing across banks, although one source said it had no material impact on the firm’s revenues in 2025.
The move highlights a growing tension at the heart of modern financial markets: banks that finance proprietary trading firms are increasingly helping competitors that are challenging their traditional dominance.
Jane Street began making markets in US Treasuries last year, moving directly into a major area of business historically dominated by banks. Its expansion has coincided with a broader shift in bond trading towards electronic platforms, creating new opportunities for large proprietary trading firms such as Jane Street and Citadel Securities.
Raman Kalra, head of non-bank liquidity provider analytics at Crisil Coalition Greenwich, said trading firms had benefited from the transition as bond markets increasingly moved away from traditional phone and voice-based dealing.
Trading firms accounted for 10 per cent of total industry revenues across fixed income, currencies and commodities in 2025, according to Crisil data. Jane Street traded more than $900 billion in bonds during the year.
Jane Street and JPMorgan declined to comment on the Financial Times report.
The decision also reflects growing concerns within JPMorgan about the role the bank plays in financing powerful non-bank competitors. One person familiar with the matter said JPMorgan traders had expressed dissatisfaction that the bank had helped build a major rival by providing financing, particularly for fixed-income trading.
JPMorgan has faced a similar conflict with Citadel Securities. The bank has cut some trading functions it provided to Citadel Securities after the trading firm launched a service competing with JPMorgan’s equities offerings, the Financial Times reported.
Jamie Dimon, JPMorgan’s chief executive, described Citadel Securities as an emerging competitor in his annual letter released in April.
The underlying business model helps explain the tension. Proprietary trading firms generally use their own capital to trade financial markets, but they also rely on borrowed money to amplify returns. That borrowing provides a steady source of fees for investment banks supplying the financing, while simultaneously giving trading firms greater capacity to compete with those same banks.
Jane Street’s growth has made the rivalry particularly striking. The firm generated $40 billion in trading revenues last year, only $1 billion below JPMorgan’s figure. It has posted revenues of about $40 billion in the year to August, partly through trading strategies that banks have increasingly avoided since the 2008 financial crisis.
Yet Jane Street’s expansion has also brought substantial risks. Some of its bets have turned sharply against the firm in recent months. In July, Jane Street recorded a $15 billion loss from wagers linked to AI stocks and an investment in Situational Awareness, a hedge fund founded by 24-year-old Leopold Aschenbrenner.
The confrontation between JPMorgan and Jane Street therefore reflects more than a single financing decision. It points to a changing balance of power in financial markets, where technology-driven trading firms are increasingly entering businesses once firmly controlled by major banks — and forcing those banks to reconsider whether financing a rapidly growing client may ultimately mean financing their own competition.
