Brexit drives push for bigger Frankfurt role in exchange merger

Frankfurt

GERMANY and the European Central Bank are pushing harder for Deutsche Boerse and the London Stock Exchange to give Frankfurt a greater role once they merge, now Britain is leaving the European Union, people involved said.

As it stands, London is due to be the home of the main holding company of the merged exchanges and the joint board would also be in Europe's financial capital but Brexit may upset the plans in favour of Frankfurt.

German regulators, politicians and the European Central Bank (ECB) all want more control over the company and for that to work after Britain leaves the EU, at least some of the critical holding company may have to be based in Germany.

The growing divisions over the holding company's location are hanging over the deal to create Europe's biggest stock market, despite high hopes when it was announced last February that the strong commitment from both sides gave it a good chance of succeeding. "Germany must have a full regulatory grasp of the holding company of the merged exchanges," said a regulator in Germany, which has the power to block the deal. "That would only be possible if the holding company is either entirely based in or has a…