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mattbrowne's avatar

What do you think about the planned merger of NYSE Euronext and Deutsche Boerse?

Asked by mattbrowne (31732points) February 10th, 2011


Many details of the planned merger of NYSE Euronext and Deutsche Börse need to be ironed out. But one American legislator is already making one demand: the New York Stock Exchange must keep its name.

Representative Ted Deutch, Democrat of Florida, said on Thursday that the exchange must retain the name it has had since 1863.

“The New York Stock Exchange is a foundation of the extraordinary American economic success story, and its name rightfully reflects the United States’ position as the financial center of the world,” Mr. Deutch said in a statement.

As DealBook previously noted, if a deal is reached, it could still face several hurdles, including regulatory and political resistance. New York City leaders have been particularly vocal about maintaining the city’s status as the leading financial capital.

NYSE Euronext and Deutsche Börse have yet to figure out a name for the combined company, which would be incorporated in the Netherlands and have headquarters in New York and Frankfurt. But all local exchanges — including, yes, the New York Stock Exchange — would retain their names, a person briefed on the matter told DealBook.

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6 Answers

ragingloli's avatar

“The New York Stock Exchange is a foundation of the extraordinary American economic success story, and its name rightfully reflects the United States’ position as the financial center of the world,”
What incredible arrogance.
Anyway, I am against a merger, the US has too much power as it is.

wundayatta's avatar

I thought it was the Germans who were leading the deal.

Anyway, if it doesn’t happen, then the NYSE is left with an old fashioned trading system that is way too slow. It has to go all digital, I think. I kind of like the idea. The more ties we have to other countries around the world, the harder it will be to make war.

ETpro's avatar

Bigger and more monopolistic is ALWAYS better in private enterprise, but smaller and less centralized is ALWAYS better in government. That’s because people run businesses, but it is a well known fact that governments are a;ways staffed by Orcs and Trolls. Bring back our monopolies. At least well known facts according to the new American right.

mattbrowne's avatar

I think they both wanted it, but Deutsche Boerse has got a larger stake in the new joint company.

iamthemob's avatar

I’m going to plead ignorance on many of the implications of this, so correct any errors if you see them.

However, the merger may very well be the kind that we should look forward to. Exchanges are a way of standardizing market information. Public companies have to meet certain financial accounting and reporting standards to be listed on the NYSE, which is self-regulated. Public accounting values differ internationally, and although there is a movement for international accounting standards, this may push such a movement (for good or bad). Accounting standards are central to the health of the market, and the SEC report on the use of mark-to-market valuation during the financial crisis in the U.S. showed how damaging certain standards can be to a firm. The report showed how the requirement to mark-to-market meant that firms balance sheets put them at risk of insolvency because of the toxic assets for which there was no market – the value just plummeted, and the asset side was devastated. Of course, this just creates more panic.

We may benefit, therefore, from more unified exchange structures which could starndardize the listing and reporting requirements based on international financial interests, which may also allow for more direct and clear requirements of incorporating costs of negative externalities into corporate value – which may in the end wind up increasing the importance of corporate social responsibility.

mattbrowne's avatar

@iamthemob – I agree with you.

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