It all began with a casual comment in a UK Sunday newspaper which was looking at the future of Merrill Lynch and its opportunities for expansion. When it came to identifying possible merger partners the newspaper wrote: 'In fact some say HSBC, which has a partnership agreement with Merrill to provide the firm's products and services on-line throughout the world except for the US, may be its best bet'.

The story continued : 'Mr Komansky [Merrill's chairman] concedes that a merger with HSBC would create such a powerful combination that 'basically the game would be over for a long time. They would give us entry into Latin America that we don't have and give us bulk in Europe'.'