Rebirth of England.

Chapter 866 Heading East
Of course, even so, the doubts about Euronext's payment ability are more of a joke.

Because both Wayne Macaulay and Barron are very clear that this time Euronext Group acquired the London Stock Exchange under the LOMX Group, rather than the entire LOMX Group. I'm afraid the purpose is to take a fancy to the LIBOR setting power held by the London Stock Exchange.

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 the LOMX Group rejected the acquisition proposal from Euronext, the US side immediately launched an investigation into whether there was any human manipulation in the LIBOR formulation process of the London Stock Exchange.

There have also been reports in some media in the United States and Europe about traders from several banks making profits by artificially manipulating the original formulation of LIBOR.

Of course, these reports will not explicitly state that the "artificial manipulation of LIBOR for profit" occurred before the London Stock Exchange took over the formulation of LIBOR, and that the British investigation into these manipulations led to the LIBOR-setting and supervisory powers being taken back from the London Banking Association and handed over to the London Stock Exchange.

In Barron's previous life, the United States exposed the Libor manipulation in the second half of this year. It not only issued high fines to banks involved in the matter including Barclays, HSBC, Deutsche Bank, etc., but also used this to exert pressure. On July 2013, 7, Euronext took over the formulation of Libor.

Later, it went a step further and directly stopped publishing Libor, replacing it with other benchmark interest rates.

You should know that LIBOR, or the London Interbank Offered Rate, represents the short-term borrowing cost (overnight to 1 year) between banks, which affects the pricing of all financial products such as time deposits, swaps, loan rates, home mortgages, etc.

According to rough statistics, there are 800 trillion US dollars of securities, loans, and various derivatives in the world that use LIBOR as a reference. Every 1 point change in LIBOR will result in hundreds of millions of profits or losses.

It can be said that behind the competition for Libor is the competition between the United States and Britain for the right to speak in global finance. Even though the United States is the world's only superpower, before that, London was still the world's first financial center.

How could America miss the opportunity to make money easily by controlling finance?

It was only because he knew the cause and effect of Libor in his previous life that Barron asked British Chancellor Darren to investigate the manipulation of Libor in advance and deal with the various banks involved in the matter as soon as possible...

Then, this loophole will be filled by taking back the Libor regulatory power and replacing the Libor setting power.

This is to avoid the situation in the past where the United States took over the formulation of Libor and eventually ended it.

After the London Stock Exchange took over the pricing of LIBOR, in order to make the process more difficult to be "manipulated", it changed the pricing scheme of Libor to make its formulation process more fair and less prone to manipulation.

The first is to increase the number of banks that collect quotes. They will increase the number of banks that quote on LIBOR from the previous 16 large banks to 25, and also add a backup list of 5 banks.

The LSE also regularly rotates between the reserve list and the 25 quoting banks to make LIBOR pricing more reasonable.

Another thing is to change the LIBOR pricing mechanism. Specifically, the LIBOR price is not set by completely counting the quotations of the 25 banks, but by randomly selecting the quotations of 25 banks from these 20 banks, and then removing the 5 highest bids and the 5 lowest bids, and the LIBOR price for the day is set with the average of the quotations of the remaining 10 banks.

It can be said that their plan can, to the greatest extent possible, eliminate the possibility of 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 to make one-sided reports on the issue. It is obvious that it wants to take action on this.

Although it is not easy for Britain to withstand the pressure from the United States in this regard, at least the situation it faces now is much better than in the original time and space. The manipulation of Libor was exposed in advance, and the pricing mechanism of Libor was reformed. In this regard, even if the United States investigates, it will not be able to find too much pain.

It is also not like in the original time and space, when the formulation of Libor was controlled by the United States, they could easily abolish it.

Next, LOMX Group sent a team to contact China Tongmo Exchange and Hong Kong Stock Exchange to study cooperation in more areas.

For example, the "MoLuntong" between the London Stock Exchange and the London Stock Exchange is the interconnection mechanism between the London Stock Exchange and the London Stock Exchange. Qualified listed companies in the two places can issue depositary receipts in accordance with the laws and regulations of the other market, and list them on the other market.

At the same time, the interconnection and connectivity of the two markets will be achieved through the cross-border conversion mechanism between depositary receipts and underlying securities.

And the in-depth cooperation between the London Metal Exchange and the Hong Kong Stock Exchange.

In addition, the London Stock Exchange will continue to expand its Chinese currency business and will replace Hong Kong to become the world's largest Chinese currency offshore center...

These actions are naturally for the United States to see - if they continue to force the issue, then in-depth cooperation with China will be inevitable.

Of course, these collaborations are also 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, just five months after Cameron became Prime Minister of the United Kingdom, he started his first visit to China.

At that time, Cameron led the largest and most luxurious team of more than 50 people in British history to Yanjing, trying to usher in the "golden age" for both sides.

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

This is partly because after the subprime mortgage crisis, Britain urgently needed external financial help to improve its economy.

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

Among the emerging economies in the world, China is the first to be hit.

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

The time he chose coincided with Barron's idea. After all, November is the 11th National Congress of the Communist Party of China, and he will be able to start cooperation with the new session at that time.

(End of this chapter)