Liffe faces combined French and German assault

THE TOP futures and options exchanges on the Continent plan to join forces to give Liffe, the London International Financial Futures and Options Exchange, a run for its money as Europe's leading derivatives market, writes Lisa Vaughan. An agreement announced yesterday between the Paris Matif and Frankfurt's DTB, Europe's second and third-largest exchanges, would give members of both access to each other's products.

Wilhelm Brandt of the DTB said: 'The agreement is not against Liffe, it is for European trading. We want to give investors a signal that we are pushing all the European liquidity into one market.'

Matif members will gain access to DTB's German government bond contracts, called Bunds, and medium-term government bond products, known as Bobls. DTB members will have access to Matif's ecu bond futures and options.

Liffe already trades a more successful Bund contract than the DTB, and is launching a Bobl contract next week.

Traders on Liffe said yesterday that the move looked like a defensive measure by DTB and Matif to shake London's lead.

But Liffe's new chief executive, Daniel Hodson, said: 'We believe its effect will be to enhance the markets and benefit the end-user, and that will benefit us.'