View from City Road: Wholesale confusion over market data
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Your support makes all the difference.The City would take a dim view of a company in a highly competitive business that did not know the revenues or market shares of each of its divisions last year, let alone in 1992. But there is a clear case of physician heal thyself when it comes to the financial industry.
After pushing the available data to its limits and doing some new surveys, London Business School has produced a revenue breakdown for the wholesale markets for 1991. This is part of the three-year City Research Project on London's competitiveness, which is to report later this year.
It concludes that the total net revenue of the wholesale markets was more than pounds 11bn in 1991. Much of this is calculated by using the spreads between buying and selling prices and multiplying by turnover. But for the securities markets this has to be adjusted for pounds 3bn 'inventory losses' on stocks held for trading - a calculation involving truly heroic assumptions - which leaves revenues at pounds 8bn.
The continued importance of traditional markets - particularly ship broking - is striking. Though most markets grew in the five years to 1991, there is little information about international market shares. The Bank of England should make better data a priority.
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