The proposed combination of Europe’s biggest futures markets will do little to help NYSE Euronext and Deutsche Boerse AG compete against CME Group Inc. in the U.S., a senior CME executive said Tuesday.
“Putting together their pools of liquidity doesn’t really create competitive advantages for them,” said Jamie Parisi, chief financial officer for the Chicago-based exchange company, speaking at an event hosted by Raymond James.
CME’s 2007 deal to acquire the Chicago Board of Trade, which mirrored the proposed combination of NYSE Euronext’s and Deutsche Boerse’s European derivatives platforms, made it more efficient for customers to group their trading and collateral on a single venue, Parisi said.
The NYSE-Deutsche deal may do the same for the company in Europe, “but I don’t think it will improve their competitive position in selling into the U.S.,” he said.
CME is facing the most serious challenge in years to its core interest-rate futures business from NYSE Euronext, which has joined up with the Depository Trust & Clearing Corp. to develop a new clearinghouse to back the strategy. Over the past decade, CME has successfully defended its U.S. turf against an attempted incursion from Deutsche Boerse’s derivatives arm Eurex.
Parisi also said that CME favors partnering with local exchanges in developing economies as its chief mode of global expansion, as opposed to making outright acquisitions.
