Is a ticker-taped Trojan Horse soon to be planted on European shores, filled with an army of US regulators, Sarbanes-Oxley accountants and overzealous plaintiff lawyers? These fears, recently voiced on both sides of the Atlantic, fundamentally misperceive what the possible New York Stock Exchange/Euronext and Nasdaq/London Stock Exchange mergers represent – a way for US exchanges to offer listing and trading alternatives to non-US companies wishing to avoid the US regulatory regime. The last thing the merger partners want is to Americanise foreign exchanges. Indeed, such a development would probably kill the deals. The real issues are whether these potential mergers reflect the end of US dominance in world capital markets and the extent to which European-style corporate governance would adequately protect investors.

What we are witnessing is the latest chapter in the evolution of the euromarkets. In the past, US banks moved to London to escape onerous banking regulation and the eurobond market was created in part to avoid US taxes. Now exchanges are moving abroad in part to avoid the US capital market’s regulatory regime. Europe should not be threatened. It is the US that should be concerned. Once a market moves abroad it is difficult to get it back.