Dr Joseph Lee at the Borsa Italiana in Milan.

Dr Lee convened a meeting to discuss innovation and inclusiveness in stock exchange interconnections at the Borsa Italiana in Milan.

The merger of the UK London Stock Exchange and Italy’s Borsa Italiana represents one of the best case studies on stock exchange interconnections.

Dr Joseph Lee of the Exeter Law School convened a meeting, as part of the pathways to impact engagement activities funded by the British Academy and the Economic and Social Research Council, at the Borsa Italiana- the Italian Stock Exchange. The merger of the UK London Stock Exchange and Italy’s Borsa Italiana represents one of the best case studies on stock exchange interconnections. Almost 10 years on since the acquisition of Borsa Italiana by the London Stock Exchange, mutual benefits have been brought to the stakeholders of the two markets.

As in many successful M&A cases, post-merger integration would need to be executed with a longer term vision of mutual benefits. Even though both exchanges had different products, systems, and processes, innovation has helped bring synergies and inclusiveness in economic growth while at the same time ensuring the continued application of the principle of proximity in the delivery of its service. The ELITE programme originated by the Borsa Italiana has become a successful CSR initiative that has impacts beyond the European borders.  

Further challenges lie ahead in the new markets of clearing, derivatives, and ETFs. Market stability, retail investor protection, financial innovation, inclusiveness in economic growth will continue to drive the development in the market infrastructure sector. The result of the referendum on the UK’s membership of the EU (Brexit) will certainly have effects on how the European market infrastructure providers provide services to their clients and the economy. London, as a financial centre, has been serving the world economies and the LSE-Borsa Italiana interconnection is testimonial to how markets and their stakeholders can benefit mutually from a cross-border interconnection. European governments and agencies must not overlook this when considering any model for the future of Europe!

Date: 4 August 2016

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