A group of global investment banks, most of them based in New York, are reportedly in talks to create a worldwide electronic stock exchange.
A report in the German daily newspaper Handelsblatt said U.S. investment banks, including Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., and J.P. Morgan & Co. plan to create the exchange together with UBS Group of Switzerland.
But UBS spokesman Christoph Meier said the company is not involved in the project. J.P. Morgan declined to comment.
The German-language newspaper, citing banking sources, said the exchange would probably be set up quickly, most likely sometime next year.
The newspaper said the idea is to link the electronic exchange with other securities markets to create a global trading network.
A source at a German bank said the Handelsblatt story is fairly accurate and that German banks are aware of the U.S. banks' plans.
The U.S. banks are choosing to go it alone after fruitless talks with European exchanges about greater unification of global capital markets, Handelsblatt said. The investment banks also find share trading in Europe too fragmented.
A banker at a major European institution who advises banks said, "I wouldn't be surprised. I think everyone is involved in this. Major exchanges are in danger of being antiquated. It's all going to shift to screen-based trading. Stock exchanges have been center point for highly fragmented industry. Now 80% of trading flows through financial institutions."
"If you don't have a strategy for dealing with this, you're going to be very surprised. It's happening very quickly," he added.
The newspaper said German banks have been informed about the project, but are awaiting more concrete information before they decide whether to support or participate in it.
-- Dow Jones