Chicago Prepares For Europe's Invasion
February 4, 2004
Members of the U.S. Commodity Futures Trading Commission (CTFC) followed their staff's recommendation to approve the plan. Trading is scheduled to start on Sunday. “We’re ready to go,” Eurex CEO Rudolf Ferscha told Der Spiegel newsmagazine, adding that everything is in place to start trading.
Even before the vote, Chicago’s financial world began to prepare for a possible European invasion: The Chicago Board of Trade (CBOT) announced it will electronically trade futures on German debt products, Bund, Bobl and Schatz futures, Reuters news agency reported.
Worried about competition caused by the rival’s arrival, CBOT, the U.S.’s second largest futures exchange, has opposed Eurex coming to Chicago. Saying that Eurex’s U.S. futures exchange would be operated by a “foreign entity,” several board members had written letters to regulators, according to Reuters. CBOT and Chicago Mercantile Exchange (CME) executives flew to Washington, D.C. to present their concerns to House Speaker Dennis Hastert, Der Spiegel reported.
Hastert, along with several other influential representatives, has received donations from both CBOT and CME, according to the magazine. Eurex, owned jointly by Deutsche Börse and the Swiss stock exchange, has faced a series of hurdles in Congress. CBOT and CME officials presented their concerns before committees and the application was moved from “fast track” to a more prolonged way of processing.
Support from Greenspan and Snow
But Eurex, which has been described as the most advanced exchanged in terms of technology, received backing from both Alan Greenspan (photo), the chairman of the U.S. Federal Reserve and Secretary of the Treasury John Snow. “Our entire economy as well as our financial markets have always benefited from competition,” Greenspan wrote to Congress, according to Der Spiegel.
CTFC staff members had recommended allowing Eurex’s to start operations, saying that concerns raised by CBOT and CME did not "provide any basis for not designating the U.S. futures exchange as a contract market," according to Reuters.