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

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
Dom Joly owns a pig. That thinks it's a dog.  

I'll bow out. Let Wilbur, the pig that thinks it's a dog, bring home the bacon

Dom Joly
 

Forget charging by the page - with books, heart matters more than heft

Katy Guest
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'