WELCOME TO PARIS, IF YOU'RE THERE ALREADY
To American-style investment banks looking at France, the message from the local inhabitants is clear: "Keep off our turf or you'll end up with a bloody nose."
The impending battle is a repeat of skirmishes in the 1970s when several US brokers -- Morgan Stanley, Lehman Brothers, Merrill Lynch, Smith Barney and Dean Witter -- operated in Paris. The fierce local competition, and the protective plating around the financial sector, drove them back across the Channel to London, which then was opening up to foreign bankers. Only Merrill and Smith Barney kept skeleton offices in France.
Now, after the surge of capital market reforms from the French socialists in 1984, the birth of many new instruments and raging markets in equities and bonds, the Americans are back in Paris -- or, rather, they're soaring overhead like birds of prey.
Shearson Lehman Brothers has set up an investment bank within the Paris branch of its parent American Express. Salomon Brothers has recruited a French team, but at present is keeping its members in London. Credit Suisse First Boston is looking for a French vehicle to buy, Morgan Stanley and Goldman Sachs, houses strong in international equities, are poised to move into France.