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London Stock Exchange - Deutsche Boerse merger under threat from Brexit

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By Euronews
London Stock Exchange - Deutsche Boerse merger under threat from Brexit

Britain’s vote to leave the European Union is threatening the planned merger between the London Stock Exchange and Germany’s Deutsche Boerse.

The finance ministry in Berlin said the two companies are looking at the consequences of the Brexit vote along with regulators.

“It is the job of the regulatory authorities to form an opinion here,” the spokeswoman told a regular government news conference when asked about the impact of the Brexit vote.

“In addition, the companies themselves will be thinking about the consequences of the result of the referendum,” she said, adding that the ministry would await any outcome.

The head of the German financial market regulator Bafin, Felix Hufeld, has come out against London as the headquarters for a combined LSE and Deutsche Boerse.

Hufeld is the most senior official to publicly rule out London as the head office of the merged group.

“Without doubt … it is hard to imagine that the most important exchange venue in the eurozone would be steered from a headquarters outside the EU,” Hufeld told reporters. “There certainly has to be an adjustment here.”

His comments were echoed by Carsten Schneider, a senior member of the Social Democrats.

He told Reuters: “Since Britain has said goodbye to the EU, the central exchange can no longer be in London. The future headquarters of the merged exchange must be subject to EU supervision and regulation.”

Deutsche Boerse declined to comment. An LSE spokesman said shareholders would vote on the deal on July 4 and the offer terms were unchanged, reiterating a statement from one day after the vote.

EU bank regulator, euro clearing to leave UK

The European Union will move its London-based bank regulator to Paris or Frankfurt following Britain’s decision to leave, while the European Central Bank will insist euro clearing occurs in the eurozone, a senior EU official said on Tuesday.

“The multi-currency union narrative is over. That’s why you will see the European Banking Authority going either to Paris or to Frankfurt,” the official said.

“That’s why you can be sure the ECB will install its location policy now. Not tomorrow, not in two weeks, but this is going to happen over the next two years,” the official said, referring to a policy that euro clearing houses should be based in the single currency area.

See also: London faces loss of big names as businesses look to beat Brexit by going abroad