Speaking at the FX Week Europe conference in London, Fisher said: "A lot of forex volume is due to the hedge funds, and they have taken a bit of a knock this year." He added that sovereign wealth funds might start to shift from an "asset management" approach to being used as a tool of economic policy by their parent governments.
The near future would also see more consolidation among investment banks, Fisher predicted. "I was surprised over the last six years by the lack of merger activity, but everyone was doing so well in all areas that there was no pressure to merge," he remarked. "We can expect to see a lot of consolidation over the next few years."
Though the general trend towards more liberalised financial markets would continue, "the long-term drivers are still in place", Fisher said. He warned that the near future could see some movement in the other direction. "I can't see the idea of liberalised markets with lots of international participation being popular with the majority. There is a risk of some closure of markets as [governments] try to manage their own markets more closely."
Fisher welcomed the disappearance of the 'search for yield', which he believes will open the way for more realistic pricing of credit risk. "I think that the search for yield will be reassessed - I would like to see some repricing of credit risk back to appropriate levels, and also liquidity risk. I think the pricing got compressed to very low levels," he said. But he added that "we could see a sustained increase in volatility because you no longer have this great wall of money crushing spreads down".
Though the pace of advances in computer technology seemed to be slowing, he said, cuts in investment budgets would be more important in determining the technological environment - and better IT could still allow more trading venues to be set up.