ALEX BRUMMER: The rot started with New Labor hypocrite Ed Balls

How nice of Ed Balls to take time out from breakfast TV and as a celebrity tell David Schwimmer and the London Stock Exchange Group how to run their business.

Balls' suggestion that the London stock market could somehow fly again as a separate entity shows naivety and a touch of hypocrisy.

One of the reasons the stock market has gone into decline is the decision by New Labor – yes, and Ed Balls – way back in 1997 to abolish the dividend tax benefits of British pension funds.

The decision led to the departure of a wall of investment money from London to overseas markets, and encouraged foreign activists and hedge funds to secure dominant positions on British share registers from which opportunistic takeovers could be launched.

The reality is that, cut off from the LSEG parent company, the London Stock Exchange, which traces its roots back to 17th century coffeehouses, would be a noose and under overseas control.

Over the past two decades, successive top executives have courageously repelled a series of would-be candidates who recognized that a foothold in the City of London, home to the world's best wholesale derivatives and foreign exchange markets, would provide prestige and a platform for expansion.

The idea that the current bosses of the London market have somehow been negligent is wrong.

The LSEG has campaigned relentlessly against the strict and uncompetitive regulations imposed by the Financial Conduct Authority, and against self-appointed governance 'experts' in asset management.

Campaigning: The LSEG has campaigned relentlessly against tight and uncompetitive regulations

It is a supreme irony that pension fund directors in Britain are demanding higher standards of governance while investing in markets like New York's Nasdaq, where requirements are woefully lax.

LSEG's purchase of data powerhouse Refinitiv for £21 billion in 2021 was a transformative deal. But it also expanded London's market presence by providing the party with fixed interest and currency trading facilities.

The London market's expansion into trading indices and data has proven to be groundbreaking and has enabled customers to take full advantage of algorithmically driven trades.

The New York Stock Exchange (part of the International Continental Exchange) has also gone the data route.

LSEG's former pursuer, Deutsche Boerse, recently bought Danish investment management software company SimCorp. The Hong Kong market diversified into commodities through the purchase of the London Metal Exchange.

Euronext, in Paris and Amsterdam, is also trying to strengthen its business, most recently with a £5 billion bid for Spain's Allfunds platform, even though that bid failed.

Certainly, the LSEG needs to be more aggressive in pursuing IPOs and put an end to the leakage of publicly traded companies into the US.

But selling the London stock exchange, which is home to a wide range of FTSE and Aim indexes, would weaken rather than strengthen its reach.

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