End of an era? Facing competition, investment bankers cut fees.

FOR more than two decades, the most expensive people on Wall Street have been conspicuously indifferent to market forces.

As the beleaguered American stockbroker has watched competition decimate his commissions--and his status--the American investment banker, in his various forms, has continued to charge the most sensational sums for his services.

He occasionally loses his job. He never lowers his price.

What's odd about this is that for much of the past two decades investment banking has been the career of choice lot the most financially ambitious young Americans. It seems not to have occurred to the market that the seemingly endless supply of investment bankers should lead to a decline in the sums investment bankers are paid.

It's as if Wall Street is governed by Say's Law: The supply of investment bankers creates its own demand. One hundred thousand Ivy League graduates might go to work on Wall Street tomorrow and Goldman, Sachs & Co. will still carve 2.5 percent out of every $500 million deal--inspiring yet more thousands of Ivy League graduates to apply for jobs at Goldman Sachs.

But now there comes grave news. A few weeks ago, Bloomberg reported that Morgan Stanley slashed its price by more than a quarter for advising U.S. corporations on their takeovers. The reason, posited by Bloomberg News, is that Morgan Stanley Chief Executive Phil Purcell had grown uneasy at the sight of his firm falling ever farther behind Goldman Sachs in the league rankings. The CEO wanted more business, so he had his firm offer to do the business more cheaply. A novel concept!

Ten days later, there followed another shocking revelation: Credit Suisse First Boston had underwritten more junk bonds in 2003 than in 2002, but made less profit from the business. The reason: Underwriters in junk bonds also had cut their fees, to an average 1.42 percent from 2.13 percent.

In a stroke, Morgan Stanley and CSFB had undermined the hoary old rationalizations for paying investment bankers too much money. No longer can anyone on Wall Street insist that his services are, like brain surgery, of such life and death urgency that they cannot be subjected to petty discussions of their cost. Nor can he suggest that he cannot provide them for less.

The closest thing in both cases to a root cause of the rampant price-cutting seems to be the entry of commercial banks into the investment banking business. (As one of Citigroup's new junk bond customers told Bloomberg News. "We can bargain harder and they feel hungrier.")

Who woke Grandma?

If one day, years from now, people look back on this epoch on Wall Street and say, "I can't believe we ever paid 28-year-olds so much to create so little," we will have commercial bankers to blame for the perspective.

Congress threw open the door and these chump-change Charlies with their 1980s suspenders and their ordinary expectations stumbled sweatily into the room and woke up the customer. The question no doubt being asked in the hallways of Goldman Sachs is how to put the old lady back to sleep. And, who knows, they may figure it out; I never would bet against the American investment banker. He has an amazing ability to get himself paid.

But his new willingness to slash his old fees raises a question: Why did it take so long? Why haven't companies that are asked to pay tens of millions of dollars to some Wall Street firm shopped around for a lower price? Why has competition among investment banks exerted such weak pressure on investment bankers to lower their prices?

I have no complete answer, only a partial one. This era on Wall Street began with a great, messy upheaval. The 1980s were one of the most innovative periods in financial history. In a rapidly changing market individuals with a slight edge can indeed be very valuable. But that period is over, or nearly so, and the markets are not so interesting or changeable as they once were.

A lot of the services Wall Street's investment bankers provide should, by now, have become commodities. That they have not is a tribute to the power of habit. If investment bankers have never needed to perform their services for less, it has been in part because they couldn't imagine doing it for less. Now apparently they can. But can you?

Michael Lewis, the author of "Liar's Poker," "The New New Thing" and "Money-Ball: The Art of Winning an Unfair Game," is a columnist for Bloomberg News.