Consolidation in global stock exchanges does not pose a threat to national industries, the chief economist of the New York Stock Exchange Paul Bennett said yesterday.
Speaking in Trinity College Dublin, where he was addressing the fourth Infiniti international finance conference, Mr Bennett said: "Stock exchanges were traditionally viewed as a national utility but in the last few years most have gone public, so that they can function better and work in accordance with the same principles as other businesses, rather than the interests of members."
His remarks come as the New York Stock Exchange (NYSE) prepares to merge with pan-European exchange Euronext in a $9.9 billion (€7.8 billion) deal that will create the world's largest stock market.
Last week French president Jacques Chirac and European Central Bank president Jean Claude Trichet added their voices to calls for the proposed merger to be rejected in favour of an alternative merger with Deutsche Börse, owner of Germany's largest stock exchange in Frankfurt.
The intervention reflects anxieties that European companies will lose out under an American merger.
Mr Bennett said that these fears were overdone.
"There is some controversy here because some countries view stock exchanges as a national asset and a way for their own companies to grow.
"But I don't see that contradiction. Economies of scale and lower costs mean small businesses can benefit from consolidation."
Both the NYSE and Euronext - which combines the stock exchanges of Paris, Brussels, Amsterdam and Lisbon - expect to make joint cost savings of $375 million from streamlining the combined groups' information technology systems and platforms.
But the chairman of the Swiss bourse, Peter Gomez, has accused the two exchanges of miscalculating the benefits of the merger.
"They [ the exchanges] are doing things in complete reverse - calculating what they need to do to be taken seriously and then coming up with the synergies in order to justify the price," Mr Gomez said last week.
Mr Bennett declined to comment further on the question of the deal's valuation or on the prospects of its success.
He expressed confidence that the worst was over as far as recent stock market volatility was concerned.
"There was clearly some feedback from inflation," he said.
"The Fed tried to be very clear about its mandate to fight inflation My own view is that things are probably well contained The fundamentals suggest that inflation will now start heading down."
