Credit crisis latest

From the FT today:

"Towards the end of the week several rivals said they had dropped internal restrictions on approaching Morgan Stanley clients when it became clear how much potential custom was available."

Why on earth do investment banks have "internal restrictions" on approaching each other's clients? I appreciate that they would end up spending lots of time chasing new leads and winning new clients only to lose existing business to the other banks who start poaching their clients. They would probably end up reducing fees and increasing sales budgets without expanding the market much, just pinching share from each other. Maybe not an ideal result for the banks.

But in any other industry that's called a cartel. Why should investment banks be exempt from competition law?

If the public is taking the opportunity to get some reforms in return for its $700bn, this could be one to throw in.

p.s. As usual, Martin Wolf's take on the issue is pretty sound.

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