Two-way fear over French vote

In a financial futures version of Catch- 22, market executives yesterday predicted problems for the industry whether the French vote 'oui' or 'non' in the Maastricht treaty referendum.

On one hand the Paris Matif, London's leading rival for the title of Europe's top futures and options exchange, forecast that rejection would wipe out one of its leading contracts.

On the other, some market officials fear that eventual monetary union would lead to dramatic changes in the industry likely to endanger some exchanges.

Addressing a conference in Burgenstock, Gerard Pfanwadel, Matif's chairman, said the summer paralysis in the ecu bond market had caused a sharp drop in activity on its successful futures contract. Although the contract had survived, it would not endure a 'no' vote.

'My markets will die. I will have a strategic problem and I will have to look for new contracts,' Mr Pfanwadel said. 'If there is no cash ecu bond market, in the long term the futures contract cannot succeed.'

At the moment, however, Maastricht fever is doing Matif good. Each time a new opinion poll result is announced volumes soar.

Turnover in ecu bond futures is 57,000 contracts a month, while the more popular National, a French long-term interest rate future, traded 16.6 million contracts in the first seven months of the year.

It is the prospect of harmony that upsets other exchange leaders. A single European currency and central bank would render obsolete the currency futures and options traded on several exchanges. Interest rate futures, a speciality on Liffe in London, would dry up.

However, Liffe's chief executive, Michael Jenkins, does not expect this to be a problem before the end of the century.

Germany's DTB futures and options exchange is considering joining the Globex screen trading system.