The Germans Are Coming! To Take Over the New York Stock Exchange


So much for all the hand-wringing that the end of American exceptionalism would be spelled M-a-d-e i-n C-h-i-n-a. After 219 years as the “citadel of American capitalism,” The Wall Street Journal says the New York Stock Exchange is close to being acquired by Deutsche Börse AG, a German company that operates the Frankfurt Stock Exchange. If regulators approve the takeover, it would become the world’s largest financial exchange — trading more stocks and futures than any other global rival, and more options than any U.S. exchange at a time when smaller, electronic upstarts have been quicker to go after emerging, lucrative kinds of trading. The new exchange would have a presence in fourteen European countries as well as the U.S.“A merger would potentially let customers trade stocks in New York, options tied to those shares in Paris and derivatives linked to them in Frankfurt,” says the New York Times. So why is this bad for Wall Street rather than just another sign, like China owning U.S. debt, of the interconnectedness of global markets?

The Journal explains:

For New York, the move is symbolic of the city’s fading dominance on the world stage as other countries are drawing investors directly to their markets. The move also is a recognition that securities trading today goes on at all hours and in all time zones, making the actual bricks and mortar of Wall Street far less important than before.

Although this marks the NYSE’s second European deal in five years (in 2006 NYSE beat out Deutsche Börse to buy Paris-based Euronext), one former trader likened it to the end of an era:

Did anyone else just get “The Way We Were” stuck in their head?

Germans in Talks to Buy Big Board [WSJ]
German Börse in Talks to Buy the Big Board [NYT]