Chapter 866 Going East
Of course, even so, doubts about Euronext's ability to pay are more of a joke.
Because both Wayne Macaulay and Barron are very clear that this time Euronext Group acquired the London Stock Exchange, a subsidiary of the LOMX Group, rather than the entire LOMX Group. I am afraid the purpose is to take a fancy to The London Stock Exchange has the power to set LIBOR.
In this case, even if Euronext Group does not have enough funds to pay for the acquisition, there will be corresponding bank support...
Sure enough, after LOMX Group refused After Euronext's acquisition proposal, the United States immediately launched an investigation into whether there was manipulation in the LSE's LIBOR setting process.
In some media in the United States and Europe, there have also been reports that traders in many banks profited from artificial manipulation through the original formulation of LIBOR.
Of course, these reports will not clearly state that the "artificial manipulation of LIBOR for profit" occurred before the London Stock Exchange took over the formulation of LIBOR, and it was also because of the British investigation into these manipulations. , which led to the withdrawal of the formulation and supervision rights of LIBOR from the London Banking Association and the transfer of the formulation rights of LIBOR to the London Stock Exchange.
In Barron's previous life, the United States exposed the manipulation of Libor in the second half of this year. Not only did it issue sanctions against banks involved in the matter, including Barclays, HSBC, and Deutsche Bank, etc. imposed heavy fines and used this to exert pressure, Euronext took over the formulation of Libor on July 9, 2013.
Later, it went a step further and directly suspended the release of Libor and replaced it with other benchmark interest rates.
You must know that LIBOR, which is the London Interbank Offered Rate, represents the short-term borrowing cost between banks (overnight to 1 year), thus affecting time deposits, Swap, loan interest rates, housing Financial product pricing for all aspects of mortgages and more.
According to rough statistics, there are 800 trillion U.S. dollars of securities, loans, and various derivatives in the world based on LIBOR. Every time LIBOR changes by 1 point, hundreds of millions of profits or losses will be generated.
It can be said that the competition for Libor is behind the competition between the United States and Britain for the right to speak in global finance - even though the United States is the only superpower in the world, before that, the world's number one financial center was still London. .
You can make money easily by controlling finance. How could the United States miss this opportunity?
Only after knowing the cause and effect of Libor in his previous life, Barron asked the British Finance Minister Darren in advance to investigate matters related to Libor manipulation, and dealt with the various banks involved in the matter as soon as possible...
Then this loophole will be closed by taking back the supervision power of Libor and replacing the power of formulating Libor.
This is to prevent the United States from taking away the formulation of Libor and eventually ending it like in previous lives.
After the London Stock Exchange took over the pricing work of LIBOR, in order to make the process more difficult to be "manipulated", it changed the Libor pricing plan to make the formulation process more fair and difficult to be manipulated——< br>
The first is to increase the number of banks that collect quotations. They will increase the number of banks that make quotations for LIBOR from the previous 16 large banks to 25, and will also add a candidate list of 5 banks.
The London Stock Exchange also regularly rotates between the reserve list and the 25 quoting banks to make LIBOR pricing more reasonable.
In addition, it is to change the mechanism of LIBOR pricing. Specifically, the setting of LIBOR price is not to completely count the quotations of 25 quoting banks, but to randomly select 20 banks among the quotations of these 25 banks. The LIBOR price for the day is determined based on the average of the quotes from the remaining 10 banks after removing the 5 highest bidders and the 5 lowest bidders.
It can be said that their plan can, to the greatest extent possible, rule out collusion among multiple banks to manipulate LIBOR.
Now the United States is once again investigating the formulation of Libor by the London Stock Exchange and has begun related one-sided reports. It is obvious that it wants to take action on this.
Although we know that it is not easy for Britain to resist the pressure of the United States in this regard, at least the situation it faces now is much better than in the original time and space. It detonated the manipulation of Libor in advance and reformed the pricing mechanism of Libor. In this regard, even if the United States investigates, it will not be able to catch too many painful feet.
It is not like in the original time and space, after the formulation of Libor was controlled by the United States, they could easily abolish it.
Next, the LOMX Group sent a team to contact the China Exchange and the Hong Kong Stock Exchange to study cooperation between the two parties in more fields.
For example, the "Magic Lun Connect" between the Magic Stock Exchange and the London Stock Exchange is the interconnection mechanism between the Magic Stock Exchange and the London Stock Exchange - qualified listed companies in the two places, in accordance with the laws and regulations of the other market, Issue depository receipts and list them for trading on the other party's market.
At the same time, through the arrangement of the cross-border conversion mechanism between depositary receipts and underlying securities, the interconnection of the two markets is achieved.
As well as in-depth cooperation between the London Metal Exchange and the Hong Kong Stock Exchange.
And the London Stock Exchange will continue to expand its Chinese currency business and will replace HK and become the world's largest Chinese currency offshore center...
These actions are naturally for the United States to see - if the pressure continues, then this kind of in-depth cooperation with China is inevitable.
Of course, these cooperations themselves are what LOMX Group is prepared to do, but the degree of cooperation between the two parties can be controlled.
Now that the LOMX Group has sent a team to China, it can be regarded as an advance cooperation negotiation for Cameron’s upcoming visit to China.
In 2010, after taking office as Prime Minister of the United Kingdom, Cameron made his first visit to China only five months later.
At that time, Cameron led the largest and most luxurious team of more than 50 people in British history to Yanjing, trying to open a "golden age" for both parties.
At this time, Cameron still attached great importance to relations with China, and was known as the most pro-China prime minister in Britain...
This was partly because Britain was in urgent need of external financial help after the subprime mortgage crisis. to improve the economy.
In addition, Cameron pursues a neoliberal economy. Therefore, he proposed a concept that Britain should serve as a "global hub." Under this concept, Britain must pay attention to its relationship with emerging economies. Because both British-American relations and British-European relations are already very stable, only by improving relations with emerging economies can the concept of this "global hub" be truly realized.
Among the emerging economies around the world, China is the first to bear the brunt.
Barron knows that Cameron is planning his second visit to China during his term of office, which is expected to depart at the end of this year or early next year.
The time he chose coincided with Barron's intention. After all, China's "18th National Congress" will be held in November, and he will be able to start cooperation with the new generation by then.
(End of this chapter)