Brexit Could Prove Favorable for Frankfurt


Posted January 17, 2017 by intoinvestments

A location change of businesses involved in merger between Deutsche Boerse AG and London Stock Exchange Group Plc, could be advantageous for Frankfurt.

 
Brexit may help to fortify Frankfurt’s position as a chief European fiscal hub if Deutsche Boerse AG concludes its $12.4 billion acquisition of London Stock Exchange Group Plc, according to a report by INTO Investments.

The union could result in a variety of possible prospects and constructive network outcomes for Frankfurt as a fiscal hub, which would in effect lessen the impact of the city’s recent decline.

The information echoes Deutsche Boerse’s justification to take control of LSE and leads up tomeetings of executives at both firms who hope to overcome objections by politicians regarding the merger.

German politicians and regulators have expressed trepidation about placing the headquarters of Europe’s prime exchange operator in London, which will soon fall outside the realm of the European Union.

Political leaders in numerous euro-zone nations have requested a regulation adjustment to force euro-denominated transaction to occur within the European Union once the Britain exits the bloc.

LSE subsidiary LCH is the globe’sbiggest clearinghouse for off-exchange interest-rate derivatives. Trading of these products, which now occurs between banking institutions, could transfer to Frankfurt in the event that deals can be reworked as on-exchange derivatives.

“While potential changes to locations of businesses are apparently not being thought of at this point, a relocation to Frankfurt would certainly benefit the city as a financial hub,” said William Carr at China based INTO Investments.

In a statement to the press London Stock Exchange Group Plc said that the two companies who would be involved in the merger are dedicated to preserving the skills and strengths of the individual firms in their respective locations and that the current regulatory infrastructure would be maintained.

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Tags brexit , frankfurt , into investments
Last Updated January 17, 2017