Reto Francioni, chief executive officer of Deutsche Boerse, said on Tuesday he sees the global consolidation of exchanges continuing, even as his own exchange moves closer to merging with NYSE Euronext.
Speaking at a conference hosted by Baruch College, Francioni said that in a globalized economy, exchanges must go global as well. It is no longer enough to focus on home markets, he added.
"There will soon be a very limited number of really global exchanges," Francioni predicted.
In many ways, Deutsche Boerse is already a global exchange. Francioni noted his company now generates most of its revenue outside of Germany. Less than a fifth of its owners are German, and more than a third are from the U.S.
The merger between Deutsche Boerse and NYSE has already been approved by shareholders on both sides of the Atlantic, but it still needs regulatory approval. European antitrust authorities are currently the largest hurdle for the deal.
Though some have portrayed the proposed merger as Americans against Germans or vice versa, that is simply not the case, Francioni said. He added that not just the exchanges, but the financial community as a whole would profit from exchange integration.
Speaking at the same conference, Larry Leibowitz, chief operating officer for NYSE Euronext, agreed with much of what Francioni said. Both men emphasized that with greater exchange consolidation it is now more important that regulation be coordinated on a global level.
When asked what the combined company might be named post-merger, Leibowitz said not only did he not know, but that he tries to recuse himself from those discussions and leave the matter to people who know more about marketing.
Though Francioni and Leibowitz were bullish on the prospects for more consolidation among the exchanges, other participants at the conference said the trend toward consolidation won’t last forever.
Bill Harts, head of exchange traded instruments, commodities and energy for Thomson Reuters, said exchange consolidation and fragmentation are cyclical. After we go through a period of consolidation, there will be another period of fragmentation, he said.
