Last week at the same time the euro came into being, the common
access trading programme allowing trading on both the London and
Frankfurt stock exchanges was launched.
The initial announcement of a common trading platform for Europe’s top
300 blue chip shares last July received extensive and largely positive
coverage, highlighting the fact that the pooling of resources by
Europe’s two biggest stock markets would enable traders to buy and sell
shares listed in both places.
The meeting of nine stock exchanges in Paris just before Christmas moved
the story on, as other major exchanges signalled their intentions to
join the alliance. Some coverage last week focused on the first few days
of trading under the tie-up, claiming that this had been overshadowed by
the euro’s launch.
Inevitably, it was a slightly slow start-it will take time for a German
investor to be as comfortable buying France Telecom as Deutsche Telekom,
but with no currency risk involved any more, it will happen. The deeper,
more liquid market it will create can only be good for Euroland, which
is now up there competing with the US as one of the world’s most
important economic arenas.
The story was covered consistently throughout Europe - demonstrating a
simple, well thought out and well communicated message. Yes, there were
some early rumblings about why France was not in on the act, but the
coverage was balanced and most commentators noted that ’you have to
Stock Exchange officials were quoted saying that there was no way a
pan-European market could function without France and that ’everyone
else is welcome to join in’. The London Stock Exchange was praised for
its ground-breaking announcement and its far-sightedness. Others said
that the alliance would help create a ’unified, liquid, low-cost
European equity market’. Even the much talked about rivalry between
London and Frankfurt didn’t dominate the coverage. Articles acknowledged
that,of course, there are lots of details still to be sorted out, such
as ownership, performance benchmarks, which IT platform should be used
etc., but this time the details weren’t going to overshadow the big
It’s good to see this kind of pragmatism for once. The UK may not have
joined the euro, but the London Stock Exchange is second in total market
capitalisation only to the US and we need to co-operate rather than
compete if we are to maintain our role in the European market.