Terry Smith is by his own admission one of the gloomiest people in the City.

The chief executive of interdealer broker Tullett Prebon warned today: "It'll continue as bad or even worse than we've seen already. It will be at least as bad as the 1930s and could even be as bad as the Long Depression of the 1870s."

Not that this is bad for his business, which thrives on volatile markets.

"Some of our customers in the shape of banks are disappearing," he said. "There are fewer of them with less capital and less appetite for trading. But even state-controlled banks need over-the-counter markets."

Smith believes banks are using interdealer brokers (IDBs) more often for two reasons.

"One is anonymity - because they don't want to reveal their positions and trade openly in the market. Secondly, they've realised that using an IDB is much cheaper than running their dealing desks," he said.

Tullett Prebon profits rose 36% last year to £155 million on revenues 25% higher at £943 million.

The first two months were up, but Smith warned: "We are ready for less favourable conditions."