London stock exchange - Now for the details...
Culture, politics and regulation each have a part to play in how, and whether, the London Stock Exchange and the Deutsche Börse can build on their proposed link-up. But what will cost the most money is systems development, and in this London is perceived as lagging behind. "The London Stock Exchange enjoys many competitive advantages over its European rivals, but technology is not among them," says Tim Harris, European strategist for JP Morgan.
In part this view, widely held by bankers, is the result of the LSE's being very slow to consolidate on the advantageous position it was in after Big Bang in 1986; and in part because whatever it has developed has either failed or been badly received. First came the failure of Taurus, the mooted settlement system which cost £400 million before it was abandoned in 1994. But everyone is now talking about the Stock exchange electronic trading system, known as Sets. It was brought in last October and is an order-driven system designed to complement, and eventually replace, the quote-driven system run by market-makers.
It has come in for constant criticism for its lack of anonymity, the possibility that brokers and traders can manipulate prices (especially in quiet trading periods), having minimum trading requirements, and short trading hours.