Magazine article The Spectator

The Stock Exchange Sells the Family Silver, So I May Have to Step in and Buy It

Magazine article The Spectator

The Stock Exchange Sells the Family Silver, So I May Have to Step in and Buy It

Article excerpt

It may not be too late for me to bid for the Stock Exchange. Open season has now been declared, Deutsche Borse (Frankfurt) and Euronext (Paris and Amsterdam) are manoeuvring for position, and there must be room for one more contender. I could even offer to save the Exchange for the nation, though not exactly in its present form. When it was a club it belonged to its members, who used its services for exchanging stock. In those days it had a monopoly, but competition has broken in and the Exchange has lost ground. I would offer to sell its stock-exchanging business to a consortium of its customers. No one, so far, has asked them what they want, but they might know at least as well as the Exchange's highly paid management, large board and fly-by-night shareholders. Once again, the users would be in command. I would leave them to it and look for the assets. The best of them, that prime site on Throgmorton Street, has already been sold for £68 million, which looks like a snip to me. Hammerson, the new owners, have asked Nicholas Grimshaw to transform the Exchange's dreary tower into a thing of beauty and utility. The surviving assets must include a well-stocked wine cellar and - so I am assured - a king's ransom in silver, which was stored in the basement of the old building and had been piling up for centuries. I see no reason why it should pass to the French or the Germans.

Realities of power

I cannot discern any sign that the Stock Exchange is ready to fight for its independent existence. A history of rebuffs and misjudgments may well have weakened its nerve. Instead its board now seems happier to play its suitors off against each other - not enough, tell me more, wait and see - until the auction reaches its climax with a recommended bid, and the directors can lie back and look happy. Efforts will then be made to assuage local feelings. We shall be told that in today's global markets, ownership and nationality no longer count, that what matters is where the business is done and that it will still come to London. After successful bids, assurances like this are two a penny. Soon enough the new owners assert themselves and the realities of power become apparent. It is an old story, and runs to a predictable ending.

Hi, Hu He

I wonder whether Hu He, my unofficial Nobel laureate, is running out of elasticity. Central bankers may pride themselves on having mastered inflation, but I have long thought that the credit belongs to the Guangdong-based knicker manufacturer who, by undercutting the whole world, has brought prices down and kept them down. Now the Bank of England's Inflation Report tells a different story. Since the spring, import prices have risen sharply, and our own surviving manufacturers have sighed with relief and hoisted their own prices more steeply than at any time for a decade. For years now, Hu He has had the rate of exchange on his side. The pound took off when it was towed upwards by the dollar and has yet to be towed down again. …

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