Outlook: Euro markets
Friday 20 November 1998
Unfortunately for the Paris bourse, Madrid and Milan proved rather keener to sign up with the Anglo-Saxons than with the French. Even Lisbon preferred the Northern alliance. So now Paris wants in and it looks as if we'll get a fully fledged pan-European market in response to the introduction of the single currency after all.
Or will we? It hardly needs saying that it is a good deal easier to tango with two than the nine. There was a genuine meeting of minds between Frankfurt and London on what needs to be done and how to achieve it. In SETS and Xetra, the two markets also have very similar trading systems.
Bringing in other markets is going to be much more difficult, both because of differing technologies and trading rules. Language and cultural differences pile on the potential problems.
Instead of a cosy merger of two, we now have an unruly gaggle of nine. It might have been even worse. Copenhagen, Dublin, Helsinki and Lisbon are being turned away in an effort to keep the numbers down. "We don't want the United Nations," one Stock Exchange source remarks wryly. Everyone wants to see greater concentration of Europe's fragmented stock markets, but even by European standards an alliance of 13 would have seemed a trifle ambitious.
As it is, London and Frankfurt are planning to push ahead with plans already announced, under which both will cease trading in each other's shares early in the new year, so as to create a single point of liquidity. Meanwhile, members of each exchange will have equal access to the other. It can readily be seen that even this quite limited degree of co-operation is going to be hard to duplicate among nine, if only because of the larger number of regulatory regimes involved.
There is another sneaking worry about all this. Everyone seems to accept without question that it is "a good thing" to integrate Europe's capital markets, and no doubt the process should help reduce the cost of capital as well as dealing costs if the concept works as it does in the United States.
On the other hand, there isn't all that much difference between the pursuit of integration and a good old fashioned cartel. It is not altogether clear that a cartel is in anybody's interests, even if big institutional investors generally agree that they would like a single European stock market and settlement system.
Consolidation ought to concentrate liquidity and greatly enhance the efficiency of stock markets. But it is vitally important that some form of competition is maintained. Europe needs its Nasdaqs and over-the-counter markets as much as its big board.
Newcastle manager taunted again as his side loses to Stoke
- 1 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 2 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 3 The Simpsons death: Creator Al Jean would 'kill himself' before a character like Homer or Lisa
- 4 British man raped while urinating in bushes at Oktoberfest beer festival in Germany
- 5 Pope Francis assures atheists: You don’t have to believe in God to go to heaven
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
British man raped while urinating in bushes at Oktoberfest beer festival in Germany
George Clooney and Amal Alamuddin wedding: The famous congratulate actor and human rights lawyer after Venice nuptials
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
'Women, walk wherever you want' posters taken down in Stamford Hill following 'unacceptable' signs separating men and women
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...