EU questions left hanging as Deutsche Börse bosses quit

By Stewart Fleming

Date: 12/05/05

New questions about the future shape of the EU's stock exchanges have been provoked by this week's decision to quit Deutsche Börse by chairman Rolf Breuer and chief executive Werner Seifert.

Seifert's resignation followed pressure from shareholders who opposed his decision to launch, late last year, a second attempt to take over the London Stock Exchange (LSE).

Graham Bishop, a consultant on securities markets, said that while it was too early to assess the consequences of Seifert's resignation, it appeared that the company no longer had a settled long-term strategy.

The new leadership, Bishop said, would have to decide whether to abandon Seifert's goal of creating Europe's dominant vertically integrated share and financial derivatives dealing platform, combining trading, clearing and settlement under one roof.

This strategy ran into heavy fire from critics who argued that, particularly if it were to succeed in taking over the LSE, it would allow the Börse to develop a quasi-monopolistic position in securities trading in the EU. They said the Börse should instead hive off the clearing and settlement business, as Paris-based Euronext has done.

Commissioners Charlie McCreevy, internal market, and Neelie Kroes, competition, have recently hinted that they want to increase competitive pressures in the EU's financial sector. The UK's Competition Commission is examining the bid for LSE from Deutsche Börse and Euronext. British government policy has long been to keep clearing and settlement separate from securities trading.

Article says that after the resignation of the chairman and the chief executive of Deutsche Börse the future of integration on European stock exchanges remained unclear.