The pixels were barely dry on my last blog post on the regulatory impact of a potential Brexit on the City of London, when news broke that LSE Group was in talks with Deutsche Börse over a “merger of equals”. The LSE has done a great job under Xavier’s stewardship of positioning itself for the practical realities of the industry today, which are all predicated on the premise of being efficient rather than merely being effective. This extends right through the trading process, and so teaming up with its German competitor makes perfect sense. Between them they would have around 40% of total European equities trading volume and, more importantly, the precious liquidity and open interest of Eurex to pour into LCH.Clearnet and soon to be launched CurveGlobal.
So how does this play out against the broader UK and European discussion? I think it just proves the point that smart business folks will find ways to do sensible deals regardless of the obstacles politicians try and put in their way. From a business perspective, then, maybe the whole Brexit question is moot – good business is good business – regardless.