Euronext sees smaller role for London
After Brexit is in place, the City’s role is expected to diminish in global markets
The UK’s decision to leave the European Union is likely to diminish London’s role as a global financial centre and may create opportunities for Euronext NV to win Chinese business, said Chief Executive Officer Stephane Boujnah.
“Post-Brexit, there is more uncertainty about the future of relationships between the UK and continental Europe,” Boujnah said in a Bloomberg Television interview yesterday. Chinese investors “are weighing their options about what is, going forward, the right gateway for the European market, the continental European market.”
The City of London’s role in global markets is being tested as executives and officials in the bloc try to expand their own financial centres. French and German leaders have also taken aim at London’s role in clearing euro derivatives. Boujnah said Brexit has opened a “Pandora’s box” and that Paris could very well be the new home for clearing operations.
Euronext, which operates stock exchanges in Paris and Amsterdam, is working on index, technology and investorservices projects with the Shenzhen Stock Exchange, the CEO said. The market operator is also arranging for European-listed companies to meet Chinese investors in Beijing next week.
“It’s extremely likely that the relationship between the UK and the single market will not be as deep as it used to be,” Boujnah said.
Euronext faces a threat from the planned merger between Deutsche Boerse AG and London Stock Exchange Group Plc, which would create a dominant player in everything from clearing indexes.
Global banks are said to plan for the loss of euro clearing after Brexit.
European Union competition authorities are looking into the deal and are expected to open an expanded probe into the transaction ahead of a September 28 deadline. Boujnah said Euronext, which doesn’t own a clearing-house, would consider buying some parts of the companies if regulators force them to sell assets.
“I am joining various stakeholders who have voiced already, for many months, their concerns that there is a risk of competitive antitrust issues,” he said. “If some clearing assets are for sale, we’ll consider them, but obviously not at any price.” to stock markets and