Let's be clear. The proposed merger between the Deutsche Börse and
the London Stock Exchange is a good idea. There are too many
exchanges in Europe and their joint operations are too costly. The
traditional exchanges face competition from new trading systems
with lower cost bases. Tradepoint, a London-based exchange, plans
to go live trading the top European stocks in July and is
negotiating with the Swiss Exchange. And Jiway, a merger between
OM, the Swedish stock exchange operator, and Morgan Stanley, aims
to target private-client brokers.
Exchange links, rather than mergers, have proved not to work in
the past. So if the traditional stock exchanges are going to
survive, consolidation and ruthless cost-cutting is the only way
forward.
However, the problem with this merger is that it is just an idea.
Two essential things must happen before it can be implemented. The
details of how it will operate must be worked...
