The Stock Exchange needs new leadership - and fast

Share

The notion that the London Stock Exchange might be about to be taken over by a medium-sized Swedish software company would, a few years ago, have been a laughable proposition. True, the OM Gruppen company's audacious bid for control of London has only a slim chance of success, but, since the collapse of the Stock Exchange's proposed merger with the Frankfurt-based Deutsche Börse earlier this week, London is definitely "in play", as they say in the City. Potential predators, such as the Paris Bourse, the US Nasdaq exchange and, of course, those Germans again, have been mooted and will no doubt be discussed in the margins of today's annual general meeting of the Exchange.

The notion that the London Stock Exchange might be about to be taken over by a medium-sized Swedish software company would, a few years ago, have been a laughable proposition. True, the OM Gruppen company's audacious bid for control of London has only a slim chance of success, but, since the collapse of the Stock Exchange's proposed merger with the Frankfurt-based Deutsche Börse earlier this week, London is definitely "in play", as they say in the City. Potential predators, such as the Paris Bourse, the US Nasdaq exchange and, of course, those Germans again, have been mooted and will no doubt be discussed in the margins of today's annual general meeting of the Exchange.

Whatever happens, it seems highly likely that London will eventually lose its independence. That fate is almost certainly deserved, as the recent history of the Exchange has been characterised by all manner of technical and managerial failures, which have damaged its ability to perform its primary role - to provide a reliable, efficient and low-cost place to conduct the business of buying and selling shares. Its reputation has suffered accordingly. At one stage a few years ago, this symbol of British capitalism even underwent a sort of semi-nationalisation, when it had to ask the Bank of England to rescue its computer systems. More recently, the Exchange failed to provide a way to accommodate properly two new groups of customers: new-economy companies that wanted to raise money by issuing shares, and a new breed of investors who wanted to buy these high-risk but potentially highly lucrative equities. It was a market that was soon catered for by the Nasdaq in New York and by the Neuer Markt in Frankfurt, but ignored by London until almost too late.

So what next? The answer lies in how London bridges the gap between the age of local exchanges, which is not yet over, and the new era of globalisation, which is proceeding but is not yet complete. Given the timing of those trends, perhaps the best solution would be for the London Stock Exchange to go it alone in the short term while continuing to explore sensible and workable solutions for integrating its activities with other, especially European, markets in the longer term.

Don Cruickshank and Gavin Casey, chairman and chief executive of the Exchange respectively, should go. London needs fresh leadership. Where that comes from - London, New York, Stockholm or Frankfurt - is ultimately less important than the maintenance of a global-class market.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Project Coordinator

Competitive: The Green Recruitment Company: The Organisation: The Green Recrui...

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Embedded Linux Engineer

£40000 - £50000 per annum + competitive: Progressive Recruitment: Embedded Sof...

Senior Hardware Design Engineer - Broadcast

£50000 - £65000 per annum + Benefits: Progressive Recruitment: Working for a m...

Day In a Page

Read Next
The Lada became a symbol of Russia’s failure to keep up with Western economies  

Our sanctions will not cripple Russia. It is doing a lot of the dirty work itself

Hamish McRae
The Israeli ambassador to the US, Ron Dermer, has been dubbed ‘Bibi’s brain’  

Israel's propaganda machine is finally starting to misfire

Patrick Cockburn
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz