The board of NYSE Euronext is “fully supportive” of Duncan Niederauer remaining as chief executive of the US exchange group despite the failure of its attempted tie-up with Deutsche Börse.
“Not just me personally but the whole board is fully supportive of Duncan,” Jan-Michiel Hessels, NYSE chairman, said in an interview with the Financial Times on Wednesday.
“We feel he has done an excellent job not only with this deal but in running the business. Duncan seems highly motivated to continue,” he added.
The comments came after the European Commission decided to block the proposed combination of NYSE Euronext and Deutsche Börse, agreeing with Brussels antitrust authorities that it would stifle competition in European derivatives markets.
Both exchange operators had lobbied furiously in recent weeks, arguing that the derivatives markets are global, not regional – as Brussels antitrust authorities have decided. Brussels also contended that the off-exchange, or over-the-counter markets did not provide significant competition for exchange-traded derivatives.
Mr Niederauer said: “It is still remarkable to me that after the [European] Commission stating repeatedly [in recent years] that the derivatives markets were global and OTC was certainly part of the equation, and to denounce all of that and base a prohibition on a narrow market definition, I find a bit surprising.”
Both NYSE and the Börse have argued that the combined group would still compete globally with the CME Group in the US and emerging exchanges in Asia.
Mr Hessels said: “I think it’s a missed opportunity for Europe and European capital markets. The Chinese and the Hong Kong exchanges one day will be even stronger and if we are not careful Europe will still be fragmented and weak.”
Earlier, Joaquín Almunia, EU competition commissioner, said: “The merger between Deutsche Börse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide. These markets are at the heart of the financial system and it is crucial for the whole European economy that they remain competitive.”
Mr Niederauer said the New York-based group’s priority now was to build up its post-trade infrastructure in London. A key element of the DB/NYSE deal was to have been that NYSE would move clearing of its Liffe derivatives contracts to the Börse’s Frankfurt-based clearing house.
Analysts have said that if the deal collapsed, NYSE would need to develop its own clearing strategy, especially at a time when clearing has become a key weapon in exchanges’ ability to compete against rivals.
Mr Niederauer said that work had already started “in earnest” in building up NYSE Liffe Clear, a fledgling clearing house in London, as a full clearing house.
“You can expect that to get done by the end of the year. I think that will be the strategic priority in the near term,” he said. “Our priority is clearly in the post-trade space.”
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