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Levitt slams U.S. markets
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January 31, 2000: 1:56 p.m. ET
SEC chief complains of slow pace of modernization for stock exchanges
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DAVOS, Switzerland (CNNfn) - Securities & Exchange Commission Chairman Arthur Levitt hit out at the slow pace of reform of U.S. financial markets Monday, claiming the move to modern technologically advanced exchanges in the United States was hindered by "the albatross of tradition."
In a speech at the World Economic Forum in Davos, Levitt predicted the imminent emergence of an electronic global trading platform, but warned that structural deficiencies in U.S. markets could hamper the process.
Levitt praised the modernization programs of several European exchanges, particularly moves to change their ownership structure and list themselves on their own exchanges.
The "membership structure [of U.S. financial exchanges] defies resourcefulness," and the move to a more profit-oriented outlook, added Levitt.
But Levitt was not so complimentary about other aspects of European exchanges, and he had a sharp exchange with fellow platform speaker Werner Seifert, the bullish chief executive of the German stock exchange, Deutsche Börse.
Seifert complained that the SEC is preventing the Börse from installing screens in the United States, and clearly disagreed with Levitt's explanation that certain regulatory activities in Frankfurt - market surveillance, reporting guidelines, etc. - are not yet up to U.S. standards.
Seifert bullish on Frankfurt's prospects
Seifert himself predicted an extremely rosy future for the Börse, which is shortly to be renamed Euroboard.com and will perform an IPO within a few months. Seifert dismissed any threat from the electronic communications networks which have proliferated in the United States, claiming only a few of them will survive as the industry consolidates and some of them flop.
But the SEC's Levitt was more cautionary. "European and Asian exchanges are well positioned for competition from ECNs, but they are not immune," Levitt warned.
Seifert promised to kick-start the long-awaited consolidation among European exchanges within a few weeks predicting "a wave of mergers", and saying the IPO would provide his company with the currency to do deals.
However, he ruled out a much-anticipated tie-up with the powerful London Stock Exchange for the time being: "London has to do its homework [before it can participate in mergers]," said Seifert. He refused to discuss which exchange he might have in his sights. 
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World Economic Forum
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