| Stock Exchange vital to Britain |
[Apr. 19th, 2006|04:56 pm] |
Stock Exchange vital to Britain
(Daily Mail Via Thomson Dialog NewsEdge)IT looks increasingly likely that a transatlantic tussle will break out for control of the London Stock Exchange.
The New York Stock Exchange confirmed over the weekend that it is in talks over a possible merger, and arch-rival Nasdaq can, if it wants, stage another 'teatime' raid today following its coup last week when it cornered a near 15pc stake.
An Anglo-American tieup would bring together the world's two most vibrant markets.
The big fly in the ointment is regulation.
London has been winning heaps of business that would otherwise have gone to the US because of 'Sarbox' - the onerous Sarbanes-Oxley rules introduced to clean up corporate America in the wake of Enron.
Nasdaq is well aware of the issue and is looking at how it can satisfy shareholders and users that Sarbox will not seep into the City, increasing costs and damaging business here.
City watchdogs have been making soothing noises. John Tiner, head of the Financial Services Authority, has played down the importance of regulatory issues in a US bid.
But nothing is nailed down. Stockbrokers' body APCIMS is not convinced that the Americans will leave London's lightertouch regime in place and wants a watertight guarantee.
Yet Nasdaq's chief executive Robert Greifeld has so far not deigned to schedule a meeting.
The government's policy is one of non-interference, but it has pondered changing its takeover rules to block a possible Russian bid for gas supplier Centrica.
The London Stock Exchange is a key part of the City's status as a financial centre. We need to make sure our national interests will not be harmed before waving through a US bid.
DR Ros Altmann - the former fund manager who championed the cause of more than 85,000 people who lost their pensions when their company schemes were wound up - is not going to let the government wriggle out of its moral responsibility without a fight.
The Parliamentary Ombudsman Ann Abraham last month slammed the government for lulling scheme members into a false sense of security and relaxing minimum funding requirements.
But the government remains impervious to the tens of thousands of human tragedies and has flatly refused to accept responsibility or to pay compensation.
Altmann is now marshalling her forces for a fightback. Lawyers are looking into the possibility of a judicial review and she will be appealing to the European Parliament along with Maurice Jones, a 66-year-old who lost his GBP34,000a-year pension when his employer failed in 1997.
Altmann argues that putting the scandal right will cost up to GBP150m a year - a drop in the ocean compared with the GBP5bn a year Chancellor Gordon Brown has milked from funds in his GBP5bn-a-year raid on dividends.
The way the government has abandoned thousands of people, whose only crime was to try to take responsibility for their own financial future, is nothing short of shameful.
Restoring trust in pensions - vital if the nation is to avoid a wholesale retirement crisis down the line - will remain a pipe dream so long as ministers persist in this stance.
SUGGESTIONS that the China Construction Bank is in talks with venerable US investment bank Bear Stearns over taking a stake of up to GBP2.3bn were hurriedly denied by the Chinese but will nonetheless inflame the atmosphere when president Hu Jintao meets George Bush in Washington this week.
Attempts by foreigners to make inroads in the US, including Chinese oil company CNOOC's bid for Unocal, have proved politically controversial.
The Americans are worried about their GBP113bn trade deficit with China and are tetchy about the yuan, which some believe is overvalued, giving an unfair advantage on cheap imports to the US.
The prospect of a Chinese toehold on Wall Street will add to the unease about Beijing's growing might.
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