Showing posts with label NYSE. Show all posts
Showing posts with label NYSE. Show all posts
Tuesday, June 14, 2011
Friday, April 1, 2011
Conyers, Jackson-Lee Outline Potential Harm and Systemic Risks of Proposed NYSE Mergers
Conyers, Jackson-Lee Outline Potential Harm and Systemic Risks of Proposed NYSE Mergers
Mergers Would Decrease Jobs and Consumer Choice---Unacceptable for Current Economic Climate
(Washington)—Today, at the Intellectual Property Subcommittee Hearing on “Competition and Consolidation in Financial Markets,” House Judiciary Committee Ranking Member John Conyers, Jr. (D-Mich.) and Congresswoman Sheila Jackson-Lee (D-Texas) raised their concerns of the potential economic harm that would result from the proposed mergers of either the New York Stock Exchange (NYSE) with Deutsche Boerse or the NYSE with the National Association of Securities Dealer Automated Quotation (NASDAQ).
We are generally against any mergers of this size. Mergers of this size must prove to the American people the immediate value they bring to job creation and stabilizing the economy. The potential for harm, systemic risks, outweigh any perceived gains in efficiency. Moreover, analysis of the consolidation in the financial exchange markets does not change relative to who the buyer is. We are against NYSE merger with Deutsche Boerse but we are equally against NYSE merging with NASDAQ. At a fundamental level, both mergers would result in fewer jobs and less choices for consumer and public traded companies.
Specific to a merger with Deutsche Boerse, the proposed merger would create massive transnational regulatory issues that the world has yet to create the infrastructure to regulate specifically which entity could effectively oversee and regulation a transnational combined company of this complexity and how much control would the US have over such transnational regulators? No entity exists right now to accomplish that necessary goal.
Merger between NYSE and NASDAQ would be akin to General Motors merging with Chrysler, such a horizontal merger in the United States should not take place, whether in the automobile industry or the financial services industry. Such a merger would result in a loss of jobs in New York and around the country, at a time when NY and the entire US cannot tolerate additional job losses. Moreover, the merger would lead to less choices for consumers in their investment choices and to companies seeking listings.
This is not a “failing industry” so that defense against competition concerns is not useful. This is simply about increasing profit by creating greater leverage for the financial exchanges.
Moreover, the question should be whether the mere existence of dollars to spend by the purchaser is sufficient enough to allow a merger to go forward. The determining factor should be an examination of the value it brings to the American people, and how anti-competitive it would ultimately be.
###
Capitol Hill appearance by NYSE canceled
Capitol Hill appearance by NYSE canceled
WASHINGTON |
(Reuters) - NYSE Euronext Chief Operating Officer Larry Leibowitz did not appear before a U.S. House antitrust panel on Friday, just a few hours after Nasdaq OMX and IntercontinentalExchange made a rival bid to acquire the exchange.
The proposed $11.3 billion joint takeover of NYSE by Nasdaq and ICE would be a 19 percent premium to the offer made by German competitor Deutsche Boerse.
Leibowitz had planned in prepared remarks to tout the proposed merger between NYSE and Deutsche Boerse. But lawmakers said the competing offer complicated the hearing, and they hope to hold a hearing in the future when all the companies can attend.
"At this point it would not be appropriate to take testimony only from the New York Stock Exchange without hearing the other companies," said Bob Goodlatte, the Republican who chairs the panel.
Ranking subcommittee member Melvin Watt said he agreed it was appropriate to cancel the appearance by Leibowitz for now. But he voiced some concerns that any hearings ahead of the two possible deals might be premature.
"I have some reservations about whether it is this committee's or the government's role to start to access competing merger proposals or takeover proposals before there is a final agreement," Watt said.
Leibowitz's prepared congressional testimony released on Friday did not reflect the morning announcement by Nasdaq and ICE. The subject of Friday's hearing before the House of Representatives Judiciary subcommittee was to examine competition and consolidation in the financial markets.
The Justice Department is expected to give any NYSE merger a thorough look, to see if it would reduce competition and drive up prices. Lawmakers have raised concerns about a German company taking over the NYSE, a U.S. icon.
"We believe that the proposed merger will strengthen the U.S. role as a leading capital market and bolster the nation's global competitiveness," Leibowitz said in his prepared testimony.
"Furthermore, the New York Stock Exchange trading floor, the physical building and the name on the facade will not change."
At least one lawmaker said on Friday he was disappointed that NYSE would not be in attendance, and said he was concerned about both proposed deals because they are bad for consumers.
Democratic Representative John Conyers called the Deutsche Boerse plan "totally unacceptable," because it would cut consumer choice and cost U.S. jobs.
Of the Nasdaq-ICE offer, he said: "The latest offer is worse. Now we are talking about General Motors and Chrysler coming together as if that is going to help the automobile industry."
Leibowitz had planned to tell lawmakers that there is intense competition among exchanges and as a result, trading fees for equities and options have fallen substantially over the last decade.
"Our merger will not impact this competitive dynamic in any way," he said in written prepared testimony.
Subscribe to:
Posts (Atom)