What the HSBC/Bermuda deal means

HSBC''s acquisition of Bank of Bermuda may create more opportunities for rivals, not fewer.

Last week's announcement that HSBC would acquire the Bank of Bermuda for $1.3 billion will create a behemoth in the Asian funds administration world that is going to have consequences for the entire industry. A series of interviews with market participants as well as deal insiders indicates that, although the merged entity will have price-setting power, the vacuum will provide room for other players that have long sought entry to Asian funds administration but would have found little room with two major players involved.

In effect, the market's desire to have an alternative is creating space for rivals, and that means the North Americans will get a crack at it, now that the...

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