Banks declare war on European exchanges

TEXT OF STORY

MARK AUSTIN THOMAS: A group of the world's largest investment banks have declared war on the major stock exchanges of Europe. The banks are planning to launch their own stock trading systems and bypass existing European exchanges. From London, Stephen Beard reports.


STEPHEN BEARD: This could be a stock market killing with a difference. Stock markets themselves could be the victims.

The seven investment banks behind the scheme include Citigroup, Morgan Stanley and Goldman Sachs of the U.S. And they account for half of all trading in major European shares.

They plan to divert much of that business away from the existing exchanges and onto their own pan-European system.

The banks say that share dealing in Europe is way too expensive, in fact five times dearer than in the U.S. Angela Knight speaks for investment managers in London.

ANGELA KNIGHT: There have been complaints about the cost of trading across Europe. I think it has only really been a matter of time before some people got together with a real, credible alternative to the exchanges that are there at the moment.

The new trading system could speed up the consolidation of existing exchanges in Europe.

In London, this is Stephen Beard for Marketplace.

THOMAS: Also today, Deutsche Boerse has dropped its offer to buy rival Euronext. This clears the way for NYSE Group to acquire the Paris-based Euronext and create the first transatlantic stock market.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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