UK wants no "interference" in megabourse ruling

Wed Jan 18, 2012 2:20pm EST
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By Huw Jones

LONDON (Reuters) - Britain urged European Union competition officials on Wednesday to reject "political interference" and "vested interests" when ruling on plans to create the world's biggest exchange operator.

EU officials have signaled they will recommend blocking Deutsche Boerse's (DB1Gn.DE: Quote) $9 billion takeover of trans-Atlantic rival NYSE Euronext NYX.N because it would account for more than 90 percent of European listed derivatives trading and a large chunk of clearing.

The two exchanges are mounting last-minute efforts to rescue the merger and Britain has made no secret of its wish to promote open markets and competition in financial areas like clearing.

The European Commission' 27 commissioners are expected to rule on the merger on February 1 and UK Financial Services Minister Mark Hoban urged them to avoid being swayed by political arguments.

"In a post-crisis market where we have seen extensive consolidation across the board, we cannot afford to sit back and sacrifice competition and customer welfare," he told a financial audience at the London Stock Exchange (LSE.L: Quote), a top rival to the planned megabourse.

The EU competition directorate general has a fierce reputation for objective and rigorous analysis, and a record of promoting the bloc's single market objectives, he said.

"It is vital that DG Competition lives up to those duties in the weeks and months to come, without political interference," Hoban said.

"I fully understand nonetheless that the Commission faces a huge challenge to resist pressure to delay, obfuscate and pander to vested interests in the EU," Hoban added.   Continued...