Competition in the International Securities Markets

Abstract

Abstract Competition among securities firms is now worldwide, with many U.S. firms staffing large offices in London, Tokyo, and other foreign financial capitals. Foreign firms also have made inroads into U.S. securities markets. The top four Japanese securities firms, larger in size than the largest U.S. firms, are attempting to increase their presence in many U.S. securities lines. At the same time, U.S. firms have had significant success in Japanese securities markets. During the 1980s, stock markets around the world experienced bull markets, with world stock market capitalization increasing from $2.7 trillion in 1980 to $11.4 trillion in 1991. The U.S. market’s share, however, fell during this period, and by 1987, Japan had surpassed the United States as the world’s largest equity market in terms of market capitalization. Then a decline in the Japanese stock market in 1990 and 1991 put the United States back on top. But even though the equities markets of the industrialized countries grew rapidly in the 1980s, the stock markets of some less-developed countries grew at an even faster pace.