| Inter-dealer brokers (IDBs) are by nature a secretive, competitive bunch. So when it comes to meeting legal deadlines for filing annual results, many firms, most of which are privately owned, wait until the last minute. This past year most have performed so dismally that they had an added reason for stalling. One big broker in London was said to have done so badly that it chose to pay a fine for missing the deadline rather than report on time. The rumour was false, but such is the mood of doom among brokers that it was highly plausible. "There is total disarray in the market," says a London broking firm head. "There is tremendous overcapacity. There will inevitably have to be consolidation." Not all brokers feel so close to the precipice, but for many the dynamics of the markets they operate in have changed so fundamentally that their survival is in question. Most seriously challenged are brokers in spot foreign exchange. This is primarily because of the rapid growth of electronic broking but also a result of overcapacity among voice brokers (the traditional telephone-dealing services). But nearly every sector of the capital markets in which IDBs operate has been affected. |