U.K. Demands No ‘Political Interference’ in NYSE-Deutsche Boerse Merger
European antitrust regulators must avoid “political interference” as they rule on a proposed merger between Germany’s Deutsche Boerse AG (DB1) and NYSE Euronext, U.K. Treasury Minister Mark Hoban said in the text of a speech.
NYSE, based in New York and operator of stock markets in Paris, Amsterdam, Lisbon, Brussels and the U.K.’s derivatives exchange, and Deutsche Boerse appealed directly to European Commission President Jose Barroso last week to try and salvage a merger, arguing a European Union ban would harm the continent’s exchanges and drive business away.
Regulators from EU Commission told the two companies they plan to prohibit the deal to create the world’s largest exchange because it would monopolize derivatives trading in the region, according to two people on Dec. 30.
It is vital that the regulator “lives up to those duties in the weeks and months to come without political interference,” Hoban will say in a speech at the London Stock Exchange today, according to remarks released by his office. “I fully understand nonetheless that the Commission faces a huge challenge to resist pressure to delay, obfuscate and pander to vested interests in the EU.”
Competitors and customers have lobbied regulators to stop the merger, which would create the world’s largest exchange. NYSE Euronext (NYX)’s Liffe derivatives market, based in London, is Europe’s second-largest futures exchange and agreed on a deal with Euronext in the face of one from the LSE.
“We see the Commission as parties in our commitment to protect and promote the single market in financial services, to meet its responsibility to secure regulation in the interest of all 27 members of the EU,” said Hoban in the text, adding that “the London Stock Exchange has always been the beating heart of the city.”
Hoban also said in the published remarks that the region can’t afford to impose a financial transaction tax unless it’s applied globally. A unilateral tax could cut European gross domestic product by as much as 3.4 percent, or 422 billion euros ($536 billion), he said.
“Without global consistency, those transactions covered by the tax would merely relocate to countries not applying the tax,” he said in the speech.
Last week, the German Finance Ministry said the nation’s goal remains to introduce a financial transaction tax in all 27 European Union countries.
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