WALL STREET PLUGS INTO LONDON
The US investment banks have remained remarkably cool throughout the City revolution. While clearing banks, merchant banks and foreign banks scrambled to buy up brokers and jobbers, the elite of Wall Street held back from the fray. Only Shearson Lehman Brothers bought into a major firm, the broker L. Messel. And when, in March 1986, foreign institutions were permitted for the first time to join the stock exchange, only Merrill Lynch, alongside Nomura, came forward.
The investment banks which dominate the New York Stock Exchange find London's Big Bang a less epoch-making event than their European rivals. "We're an intenational firm, with international objectives, who can't join all the domestic exchanges immediately," said Peter Ogden, a partner of Morgan Stanley. "Tokyo was our first priority and we have joined that. Give our interest in European equities, we've an obvious interest in participating in European exchanges -- but that would only come about when we are clear what the ground rules would be." Morgan Stanley already trades leading UK equities over the counter in London and New York.
A disincentive to joining the stock exchange before October 27 is single capacity.