Europe’s exchanges will regret the missed opportunity to create a powerhouse
The protracted wooing of the London Stock Exchange is set to continue. Nasdaq will be free to lift its 25% stake further on October 2.
The bosses of Europe’s big three stock exchanges, the LSE, Deutsche Börse and Euronext, deserve to have their heads knocked together. They appear to have let their egos get in the way of getting together and forming a genuine European powerhouse. The result is that Europe has given the upper hand in exchange consolidation to its rivals in the US.
This is, from a European perspective, a tragedy. Europe’s exchanges set the current blueprint for what a modern exchange should be. They were the first to demutualize and list and the first to realize the benefits of electronic trading, even if there is a ridiculous US patent claiming that it was invented in the States. While the likes of Deutsche Börse, Euronext and the LSE, not to mention Eurex and Liffe, established new market paradigms, most US markets refused to move away from open outcry trading until they absolutely had to do so.
But even though Europe’s exchanges were light years ahead of the US rivals in their market structure and use of technology, there is no way that any of them could ever have taken over one of their US rivals – the land of free trade would simply not have allowed it.