Mergers and financial stability: Don’t clear the clearers

Posted: April 1, 2016 in economy
Tags: , ,

UK Only Article: 
standard article

Issue: 

Beware the cult of Xi

Fly Title: 

Mergers and financial stability

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The merger between Deutsche Börse and the London Stock Exchange should be blocked

AT THE peak of the financial crisis, in 2008, the Office of Fair Trading objected to a merger between Lloyds TSB and HBOS, two big British banks, saying that competition would suffer. The finding was overruled by the British government (on advice from the Bank of England, among others), which judged that a merger would increase financial stability. The ideal response to the proposed friendly merger between Deutsche Börse (DB) and the London Stock Exchange (LSE) would be a mirror image of the treatment of the Lloyds-HBOS tie-up. If Europe’s trustbusters bless the deal, governments should block it unless its backers allay concerns about financial stability.
Much of the opposition to the mooted DB-LSE merger draws on predictable arguments: fear of foreigners taking over national stockmarkets and concerns about the new outfit’s pricing power. But the real objection to …

via Economic Crisis http://ift.tt/1UEZ2HS

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