The total amount of M&A fees paid to investment bankers has slumped by 19% this year, according to Dealogic. In the year to date, corporates have paid advisers $2.7bn (€2.4bn), as against $3.2bn during the same period last year. In 2002, total fees reached $5.3bn, as against $9.9bn in 2000.

While fees have slumped, M&A volumes in Europe are only running at 3% less than last year. The decline is due to the increasing use of internal M&A expertise by big corporates and the growing involvement of financial sponsors, which tend to reward bankers on a success-only basis. However, banks have not changed fee scales and corporates have not put them under pressure to reduce them.