The international financial markets have entered an era of permanent revolution. It is now almost beyond the wit of man to keep up with the ever-accelerating rate of change in the capital-raising business.
As they enter 1986, international banks and securities houses face a very unpleasant question. In a bewildering environment, where new regulations, new products and new trading games are created daily, what strategy should a Eurobank employ? How can a bank keep itself safe and make a little honest money in a world gone mad?
In the pages that follow, Euromoney examines the thicket of problems that international securities firms must hack their way through in the coming 12 months, and the plans of attack they are developing. It will not be very complimentary reading, since the strategies employed in 1985 by many players were deeply flawed. "They have been running around like headless chickens, scared of all the new things that are happening, because they can't keep up,' sneered the capital markets chief of one leading Eurobond house.
None of the leading international investment banks succeeded in predicting and adapting to all the changes of 1985: the volume explosion of Eurobonds from $86 billion to nearly $150 billion, the liberalization of the Euro-Deutschemark bond market, the arrival of Euro-equities and the replacement of syndicated loans by Euronotes.