NYSE Euronext in the Fast Changing Landscape of Global Financial Markets

NYSE Euronext in the Fast Changing Landscape of Global Financial Markets

Joost van der Does de Willebois is the CEO of Euronext Amsterdam and Member of the Management Committee of NYSE Euronext. During a dinner on March 6 in Noordwijk he outlined NYSE Euronext’s outlook on the historic trade and financing links between the US and the Netherlands that have led to the present union of the Amsterdam bourse (within Euronext) and the New York Stock Exchange.  

 

Photo: Joost van der Does de Willebois

 

The late Middle Ages were a golden age for city-states. Merchant guilds created a network of them that dominated trading along the Baltic and North seas for centuries. Cities such as Lübeck, Hamburg and Bergen flourished in this early form of globalization. Later in the 17th century we see Amsterdam’s role in financing important developments in Far East trade as well as early developments in North America – from share financing of Henry Hudson’s voyages 400 hundred years ago, to facilitating the Louisiana Purchase, to financing railways and heavy industry investment in the USA during the 19th and early 20th century.

 

 

 

In time, the early 21st century may come to be seen as a golden era for a different sort of globalized city-state. Its protagonists are found in places like London's Mayfair, lower Manhattan and Hong Kong's central business district. Rather than loading ships, they spend their days (and many nights) in front of computer screens, moving zillions of dollars, pounds, euros and yen around the globe at the flick of a key.

 

 Photo: Joost van der Does de Willebois

 

Technology, some predicted, would end this sort of clustering in city centers. Why would financiers want to live and work in pricey, jam-packed urban jungles? Armed with broadband, mobile phones and BlackBerries, they could work from almost anywhere. Yet as the recent market turmoil has showed, a BlackBerry operated from a beach is not always enough. Besides, those urban jungles have their compensations with their trendy night clubs, cultural life, market stalls, lofts and luxurious apartments and cafés. So rather than dying out, financial centers are proliferating.

 

The city-states that dominate today's financial world are connected not only by mobile capital and people, but increasingly by exchanges too. Exchanges have traditionally been at the heart of important financial cities. They grew up serving mainly national markets, but have changed fundamentally in recent years. A growing number are now publicly owned, which has forced them to shed their clubby ways and compete more openly.

 

 

 

Now they are teaming up across national borders. The first ever transatlantic merger between exchanges took place early in 2007 when the New York Stock Exchange bought Euronext, a pan-European exchange group. The deal is being closely watched as a precursor to further cross-border consolidation. The NYSE-Euronext merger is the most ambitious attempt yet at cross-border exchange consolidation. No doubt there are still barriers to integrating the exchanges, ranging from distance and time zones to differences in culture and business practice.

Share Trading Worldwide

 

The exchange business is being driven by computer size and speed. National exchanges with manual accounting and no competition have given way to trades happening in 10 nanoseconds on an international and highly competitive scale.

 

The Amsterdam’s exchange headcount has fallen from over 1000 a decade ago to 200 today. Capital markets are global and exchanges are just following the demand – and the pace is a scorching one. Joost van der Does de Willebois sees 3 or 4 global players with some niche players surviving in due course.

 

 To view all photos, please click here.