Around the time of London’s Big Bang in 1986, Jeffrey Knight, then CEO of the London Stock Exchange (LSE), was quoted as saying that the title of Europe’s stock exchange was London’s to lose. Mr Knight has been proved unwittingly prescient. The current bids for the exchange, from Deutsche Börse and Euronext, signal the end of independence for a 200-year-old institution but the question is whether they are a sign that the LSE brand has been squandered or of the LSE’s success. And this goes straight to the heart of the debate about the nature of a stock market.
If the role of the stock exchange is to maximise the pool of liquidity and extend users’ access to the greatest number of global equities in an efficient and orderly manner, then the LSE is a roaring success: it is the most international exchange and is the biggest and most profitable standalone stock exchange in Europe.
