London faces threat as centre of finance

LONDON’S POSITION as a global financial centre is under threat from the proposed merger of Deutsche Börse and NYSE Euronext as…

LONDON’S POSITION as a global financial centre is under threat from the proposed merger of Deutsche Börse and NYSE Euronext as key investment decisions affecting the group’s UK businesses may shift abroad, the chief executive of the London Stock Exchange, Xavier Rolet, has warned.

“There’s definitely a medium-to-long-term threat which we believe is not completely understood in the UK,” said Mr Rolet. He added the UK was under-represented in Europe, reducing its ability to fight its case amid sweeping reform of the sector.

“In terms of the prudential regulations, of credit, insurance, financial stability, there is a European framework where the UK has a voice but not a voice which is in keeping with the size that London and the UK represents.”

He pointed out while the UK’s Financial Services Authority had a seat on the European Securities Markets Authority, the pan-European watchdog set up in Paris in January, it had 8 per cent of the group’s vote, while the UK represented two-thirds of financial services activity in Europe: “There’s a clear mismatch there and a risk.”

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His comments come as European anti-trust authorities are expected to decide whether to intensify their probe into the planned Deutsche Börse-NYSE Euronext combination. Winning the approval of Brussels is the last hurdle, after shareholders of both exchanges last month approved the deal. The tie-up will create the largest exchange by revenues, spanning US and European equities, futures and options, and clearing