Chapter 866: Eastward

Of course, even so, doubts about Euronext's ability to pay are more of a joke.

Because whether it is Wayne Macaulay or Barron, it is 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. LIBOR formulation rights.

In this case, even if Euronext does not have enough funds to pay for the acquisition, there will be corresponding bank support...

Sure enough, after LOMX Group rejected Euronext's acquisition proposal, the United States immediately launched an investigation into whether there was artificial manipulation in the London Stock Exchange's LIBOR formulation process.

In some media in the United States and Europe, there have also been reports that traders at 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 that led to the formulation of LIBOR. The power and supervisory power was withdrawn from the London Banking Association and the formulation power of LIBOR was handed over to the London Stock Exchange.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 high fines to banks involved in the matter, including Barclays, HSBC, and Deutsche Bank, but also As a result of this 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 all aspects of time deposits, Swap, loan interest rates, housing mortgages, etc. Financial product pricing.

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.

It is easy to make money 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.

At that time, 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——

The first is to increase the number of banks that collect quotes. They will increase the number of banks that make quotes for LIBOR from the previous 16 large banks to 25, and also add 5 banks to the candidate list.

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 LIBOR pricing mechanism. Specifically, the LIBOR price is not determined by completely counting the quotations of the 25 quoting banks. Instead, the quotations of 20 banks are randomly selected from the quotations of these 25 banks, and then the quotations are removed according to the The LIBOR price of the day is determined by taking the average of the quotes from the 5 highest bidders and the 5 lowest bidders from the remaining 10 banks.

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 it is known 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.

Not to mention that after the formulation of Libor was controlled by the United States, they could easily abolish it like in the original time and space.

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 issue depositary receipts in accordance with the laws and regulations of the other market, and Listed and traded 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.

and 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, replacing HK and becoming the world's largest Chinese currency offshore center...

These actions are naturally for the United States to see - if it continues to force it, then this kind of in-depth cooperation with China is inevitable.

Of course, these cooperations are also what the LOMX Group is prepared to do, but the degree of cooperation between the two sides can be controlled.

Now the LOMX Group has sent a team to China, which can be regarded as an advance cooperation negotiation for Cameron's upcoming visit to China.

In 2010, Cameron took office as British Prime Minister and started his first visit to China just 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 start the "golden age" of both sides.

At this time, Cameron still attached great importance to the relationship with China and was called the most pro-China Prime Minister in Britain...

This is because Britain urgently needs external funds to help improve its economy after the subprime mortgage crisis.

In addition, Cameron pursues neoliberal economics, so he proposed a concept that Britain should act as a "global hub". Under this concept, Britain must pay attention to its relationship with emerging economies, because both the UK-US relationship and the UK-EU relationship are already very stable. Only by improving relations with emerging economies can the concept of "global hub" be truly realized.

Among the emerging economies in the world, China is the first to bear the brunt.

Barron knew that Cameron was planning his second visit to China during his tenure, which was expected to start at the end of this year or early next year.

The time he chose coincided with Barron's intention. After all, November was the "18th National Congress" of China, and he could start cooperation with the new session at that time.