The global flows of capital have become a tidal wave. Bank boardrooms in London, Hong Kong, Manhattan, Zurich and even in Riyadh, Beirut and Dubai are filled with ideas for innovative bank merger deals. Banks merge with insurance companies as Lloyds TSB did with Scottish Widows in the City and Citicorp did with Travelers on Wall Street. Even in France, that bastion of dirigiste crony capitalism, BNP, Societe Generale and Paribas are drawn into a vortex of a merger soap opera. Regulations like Class - Steagall, that separated investment and commercial banking since the time of FDR and the Great Depression, are now dead.
Merger mania puts together strange bedfellows in international high finance.
For instance, Morgan Stanley was the quintessential white shoe investment bank, financial advisors to the Fortune 500 and the world's richest companies, governments and people. Yet Morgan merged with the mass market retail broker Dean Witter in 1997. Deutsche Bank, the symbol of German's industrial financial complex since Count Bismarck forged the First Reich, bought London merchant bankers Morgan Grenfell and Wall Street's de facto high tech hedge fund Bankers Trust. UBS and Swiss Bank form a banking colossus in Zurich, the epicenter of the Alpine gnome kingdom. In Seoul, Goldman Sachs buys a Korean bank stricken with the Asian flu.