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Belief is gaining ground that French companies must look to cross-border merger and acquisition opportunities to strengthen their competitive position. Shortage of capital is another major problem. In banking and insurance many believe that throwing off state shackles may provide the answer. The year 1992 has had more air-time in France than anywhere else in Europe. To a large extent this is because the vision of a great France in united Europe was taken up by politicians of various colors to excite the electorate in the May elections. French private-sector companies, meanwhile, have started to seize cross-border opportunities.

The article focuses on French stock exchanges. French brokers have had the monopoly on securities trading since 1807, a monopoly sustained by law. The office of agent de change is conferred by the government and can be passed down through the family or sold. Until 1967 it was forbidden to solicit clients or to advertise. Times have changed. The agents de change now have to cope with a ballooning bond market, the source of which was the socialist government. The problem facing the government in 1982 was how to finance a large state deficit said Michel Develle, chief economist at Banque Paribas. One measure taken was to encourage investment in long-dated government bonds. Another stimulus to the market was the effect of low economic growth which depressed corporate lending requirements and rendered obsolete the old system of encadrement du credit. Since 1981 bond trading has increased more than sixfold. Foreign demand for equity doubled between 1984 and 1985. while domestic demand from individuals. financial intermediaries and corporations has also increased.

This article presents information on the outcome of the stock market crash that occurred during the year 1987. Despite the crash the French Treasury was undisturbed. Anyone lucky enough to have bought stock at the offer price in all French privatisations this year would have been able to sell the issues for an aggregate gain of 20%; the Paris market itself had appreciated by 4% on the year before the crash on October 20, 1987. The possible gains declined steadily after Sogénal, the Alsatian subsidiary of Société Générale, was floated with an initial market quotation at an 80% premium on the offer price. The TF1 issue, the last on the open market before the crash, traded at an 8% premium to the offer price. Since then, things have changed. The issue of Compagnie Financière de Suez stock was caught up in the turbulent market, and on October 27, 1987 there were grey-market quotations in London suggesting discounts of between 2% and 7%. All the stocks, except notably Saint-Gobain were being offered after the crash around or below the first quoted prices.

This article points out that France's insider dealers are going to have to be a lot more careful now that the Commission des Operations de Bourse has the power to freeze or seize assets, to search out and confiscate evidence, and to impose fines for as much as Ffr10 million.

This article focuses on the French finance minister Edouard Balladur who has announced that the capital of French brokers would be opened up to the banks wanting to buy in. It seems like nobody is in a hurry to provide the capital that will allow a broker to muscle its way into the equity market of tomorrow. For the bigger brokers , association with a bank is not obligatory. There are half a dozen houses big enough to gear up for deregulation through equity issues on the second "marché" the Paris equivalent of London's unlisted securities market. This is what broker Thierry Thuffier of the brokerage Thuffier-Ravier plans to do, hoping for a listing of his company in September or October this year. He is the first of the brokers to break ranks and go it alone. French brokers are estimated to receive 80 percent of their sprawling branch networks and have access to a huge client base. At the beginning of 1998, when banks can buy up to 30 percent of a broker's equity, many brokers may find their orders decline dramatically as banks focus on trading through their newly acquired partners.