The big squeeze; Share trading.(Banks, brokers and exchanges fight over share trading)

Economist (US), The, October, 2006

Banks, brokers and exchanges fight over the crumbs of share trading

FOR 20 years, share traders have, like Mark Twain, been able to scoff at reports of their own demise. In the wine bars of Wall Street and London's Square Mile, their voices (and shirts) are as loud as ever. But though stockmarkets are buoyant, the banks, brokers and exchanges where they work are grappling with forces that they can barely control. Aggressive customers, competition from computers and encroaching regulation are transforming the once-iconic business of trading.

Barely a week goes by without new signs of upheaval. Banks and brokers, whose commissions on equity trades have fallen by 6% a year over the past 20 years (see left-hand chart), are trying to steal some of the...

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