Merrill Lynch's efforts to build a foreign exchange business essentially from scratch may have rivals casting doubts, but it is doing an impressive job building client bases, products, and volumes.
As a result it climbed from twenty-fourth to eleventh in the market share rankings of the Euromoney forex poll 2003, which was conducted just as Merrill's European operations were getting established.
For overall market share, the bank has almost tripled volumes from 1.1% of the total in the 2002 poll to 2.98% this year. When counting only volumes from institutional investors, Merrill's market share has risen from 1.52% to 3.41% over the same period.
While those market share figures may look small compared with those maintained by the very biggest firms, it is clear that the bank has boosted its presence. This is not a simple task - high volumes are in part generated by high volumes as they enable a dealer to give good flow information, analytics, advice and, perhaps most important of all, liquidity. No bank can do that by magic - it requires significant investment, both financial and strategic.
The point at which Merrill Lynch started to look serious about its forex ambitions was when it appointed Michael DeSa as global head of the division.