Commerse, Economic and Personal finances :: World finance

Years long dream of European exchange ended in half an hour


After more than a year of negotiations, Deutsche Boerse got only 30 minutes notice on Sunday from the London Stock Exchange that their planned merger was effectively over, sources familiar with the talks told Reuters. The LSE, in a highly unusual step, was about to publish a statement saying it would reject European Union demands needed to win approval for the 29 billion euro ($30.7 billion) deal. London's lack of consultation with its merger partner underscores a breakdown in relations that officials and executives involved in the talks say was as responsible as any antitrust condition for the failure of the latest attempt to combine the two exchanges. The LSE move followed weeks of acrimony over German pressure to give Frankfurt preeminence as the headquarters for the combined firm over London, sources told Reuters. Its refusal to sell the MTS Italian fixed income trading business and its prediction that Europe's antitrust authorities would likely block the deal, have all but ended the merger and knocked the share prices of LSE and Deutsche Boerse, both of which declined to comment on Tuesday. Talks were derailed by German demands that the headquarters be moved to Frankfurt and an investigation by state prosecutors into possible insider trading by Carsten Kengeter, the chief executive of Deutsche Boerse who was set to lead the combined group, the sources said. Kengeter denies any wrongdoing."There have been tensions for a longer time," said one person with knowledge of the negotiations. In early February, Thomas Schaefer, the finance minister of the state of Hesse, home to Deutsche Boerse, called for the headquarters to move to Germany because of Britain's planned departure from the European Union. His remarks were the clearest such public demand in Germany and were noticed by lawmakers in Westminster, who afterwards held a rare public debate in the British parliament on the future of the LSE, with some questioning the merger.

Schaefer had anticipated the resistance that his demand would meet in London. "They don't want to be the first to send a clear signal that Brexit has unavoidable disadvantages for Britain," he told Reuters. Deutsche Boerse had attempted to find a compromise, fearing that German authorities would otherwise block the deal, said two people familiar with the negotiations. In the weeks that followed Schaefer's remarks, Deutsche Boerse made attempts to discuss establishing a joint holding company with LSE, similar to that of Franco-German group Airbus."We could have talked about it and come to the conclusion that we could not agree," said one source. "But the LSE didn't even want to speak about it."

MISTRUST The sudden move by the LSE came despite what sources familiar with thinking at the European Commission have described as a willingness, in principle, to give its blessing to the deal to create Europe's biggest stock market. Those people said EU antitrust officials feared that rejecting the deal would allow a rival from outside Europe, for example, Asia, to buy the London Stock Exchange (LSE), thereby dwarfing continental rivals. It nonetheless imposed strict preconditions, including the sale of MTS. A spokesman for EU antitrust chief Margrethe Vestager said on Tuesday its handling of the case was based on "facts and law and not other considerations".

For some observers, the breakdown is no surprise. Dirk Schiereck of the technical university of Darmstadt, who carried out a study on the merger, predicted it last week."The Germans are afraid of London's dominance and the Londoners are worried that Frankfurt could take away business," he told Reuters in the days ahead of the LSE's statement. It leaves the future strategy of the exchanges uncertain and lingering disappointment in both financial centers."Frankfurt lost having a feather in its cap," Sharon Bowles, a non executive director of London Stock Exchange plc and former lawmaker in Brussels, said. "And we have lost an olive branch in Brexit negotiations."

Your money new ways to keep a kid in books without going broke


Aug 15 In the middle of my last vacation, I found myself calling the beach town library in a panic, looking for books two and three of Trenton Lee Stewart's popular "Mysterious Benedict Society" series. I thought it would take my daughter a week to finish the first one. But she was so entranced, she finished it in two days. Yes, that's a humblebrag, but it's also a budget-minded parent's nightmare: If those books weren't on the shelf at the library, I was probably going to end up buying them at full price - about $14 - because how can we not encourage our little readers? They make us proud, but they chew through so many books so quickly they could drive us to bankruptcy. Having already gone through Harry Potter (seven used copies cost me $28), my daughter has set her sights on the five Percy Jackson books ($5 each new) and 13 Lemony Snickets ($6). I'm secretly hoping she never discovers Nancy Drew (64 books in the original series). While this is hardly a new dilemma - my parents had to deal with my own "Encyclopedia Brown" addiction - there are modern tricks that make it easier than ever to manage the costs, and not all of them require handing a kid an electronic device. LIBRARY DILEMMA My free borrowing options would seem to abound - I live in Brooklyn and work in Manhattan - but big isn't always enough. None of the 61 copies of the "Mysterious Benedict Society and the Perilous Journey" owned by the dual library systems were on shelves anywhere near me. The two boroughs have a handful of e-books, but they are almost always checked out. The answer is to plan in advance - a simple phone call or a few clicks on a library website can get you exactly what you want.

"You can be sitting talking to your daughter's teacher, and if she suggests a book, you can pick up your phone, reserve it and have it sent to your local library," says Michele McGraw, a coordinating librarian for the Hennepin County Libraries in Minneapolis. "Technology has made this much easier over time, and people are more adept at using the tools."A BOOK IS A CLICK AWAY In the past, borrowing a book on an ereader was a multi-step process that involved plugging the device into a computer. But new options from Overdrive, which provides lending technologies to libraries, allow a book to be wirelessly transmitted to many devices.

On a laptop, you can just click on your selection from your library's website, put in your card number, and the book automatically pops up in its own reader. On a mobile device, you first download an Overdrive app, then click through to your library's Web catalog."All you need is a connection and a library card," says Steve Potash, the chief executive officer of Overdrive. The number of copies is still limited, though, because publishers treat library ebooks the same as physical books, meaning only one person can check out a copy at a time. But at the New York Public Library, the staff assesses data every day, even on weekends, and can buy copies when there are too many holds on one book. Nationally, more money than ever is going toward juvenile books as demand grows. In New York, downloads of juvenile books jumped from 5 percent of all digital circulation in 2011 to 17 percent in 2012.

"I understand when you really just want to read that title, and there's a long hold list, it can be frustrating," says Michael Santangelo, electronic resources coordinator for the NYPL and the Brooklyn Public Library. More school libraries will be coming online this fall, says Overdrive's Potash. The company is working with more than 4,000 U.S. schools now, and by the time school starts he says that 25 percent of students will have access to digital reading material. COMMUNITY SWAPPING In some communities, you can find innovative used book stores like John Martosella's trio of Book Swap Cafes in the New Jersey towns of Haddonfield, Medford and Ship Bottom. His customers don't just browse, they come in with a couple of titles and get credits for each one they swap. He says 75 percent of his business consists of parents looking for children's books, and he has many families he counts as regulars. Schools and parent organizations may sponsor books swaps. And there are online sites that allow trading, like Bookmooch.com, paperbackswap.com and Titletrader.com, though selection and availability are limited. You can rent books from booksfree.com, but that might not save much, as the regularly monthly subscription fee is $14.99 for a two-books-at-a-time plan. Ebooks are more difficult, and sometimes impossible, to trade. None of the "Mysterious Benedict" books are lendable, for instance. For titles that are, you can try out a site like eBookFling or Booklending.com. As for me and my fast-reading daughter, our luck was good: The vacation library had the Benedict books. While my daughter raced through volumes two and three, I picked up the first one - and it took me the rest of my vacation to finish it.