Trading Execution Prices Are Seen Plunging in MiFID Share Grab
- Big banks may drive smaller companies out of equities trading
- Investment banks are already contending with shrinking margins
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Banks competing to defend or increase their share of equity-trading revenues after sweeping European regulations start next year may drive down the cost of execution in a price war, according to three executives.
The collapse in prices, which one manager projected could cut the industry’s revenue pool from executing trades by as much as 40 percent, would play out if big investment banks were willing to sustain losses until smaller rivals give up, according to the people, who asked not to be identified. The larger firms may see an opening to push out competition because margins are already thin in stock trading, the people said.