Takeover of the LSE is a major risk, say Germans

A TOP German regulator has warned a takeover of the London Stock Exchange could pose a major risk to Europe’s financial system.

Frankfurt-based Deutsche Boerse is planning to seize control of 215-year-old LSE in a deal worth £21m.

But Andreas Dombret, a board member at Germany’s federal bank the Bundesbank, said he was concerned the tie-up could create a sprawling behemoth that was too big to be allowed to fail without massive costs, meaning taxpayers would be forced to pick up the tab.

‘When several clearing houses come together in a single exchange operation, I see it with a certain amount of concern,’ Dombret said.

It came as the institutions submitted merger plans to competition authorities in Brussels amid scepticism in the UK and abroad.

The European Commission could sink the plans if it objects.

Dombret was echoing concerns raised in Britain by City grandee Lord Myners.

The former Treasury minister has said he feared British taxpayers might be left to foot the bill if the merged institution collapsed.

There is growing pressure on the Government to block the deal from critics who fear it is against Britain’s national interest.

LSE shares fell 0.74pc, or 21p to 2801p.