CHAT WITH STÉPHANE BOUJNAH, EURONEXT CEO: KEEPING EUROPE COMPETITIVE IN CAPITAL MARKETS
Insufficient funds is our most significant barrier to success.
In a post-Trump era, Europe faces economic challenges as capital moves to U.S. exchanges. Stéphane Boujnah, CEO of Euronext, isn't shying away from the challenge. He's banking on initiatives like a unified IPO prospectus and accelerating integration across Europe to attract more equity.
Europe: herbivores in a land of carnivores
The election of Donald Trump has made it clear that Europe can't sit idly by, relying on outdated conventions. The U.S. is bolstering its economy with tax cuts, deregulation, and trade barriers, pulling away from the World Trade Organization's rules. Europe needs to speed up its game, with stronger leadership and quicker decision-making.
The need for Financial Champions
Consolidation in the defense and financial industries is crucial for Europe's survival. Current market leaders, like BNP Paribas and Deutsche Bank, struggle to match the size of U.S. competitors like J.P. Morgan. Europe needs larger players to stay relevant in the global economy.
IPOs in 2025: a dynamic year
Boujnah is looking forward to a busy 2025, with a pipeline of IPOs expected to eclipse that of 2024. The pipeline is full of young, promising companies, ready to take their place on European exchanges.
Mobilizing Equity Capital
Europeans need to reform their pension systems to direct more household savings towards capital markets. This would help in mobilizing the capital needed to support tech companies and other industries. In the meantime, a single IPO prospectus, similar to the U.S.'s S1-form, could simplify the IPO process and make listings more appealing.
Regaining the Competitive Edge
European exchanges can take matters into their own hands. They can simplify and harmonize listing rules, promote competitive financial infrastructure, leverage market integration, focus on sector-specific advantages, address tax and incentive disparities, and promote the benefits of diversification. By doing so, they can create an environment that attracts companies and keeps Europe competitive in the global capital market scene.
- Basel, in 2025, might witness a surge of exchanges as Stéphane Boujnah anticipates a pipeline of Initial Public Offerings (IPOs) exceeding that of the previous year, attracting young, promising European companies.
- In the competitive landscape of finance, European exchanges, such as Basel's Börse, are urged to establish financial champions to match the size of U.S. competitors and retain relevance in the global economy.
- The fragmented nature of finance investing in Europe could be improved by reforming pension systems, directing household savings towards capital markets, and adopting a simplified IPO process, like the U.S.'s S1-form.
- European exchanges should proactively address challenges, such as harmonizing listing rules, promoting competitive financial infrastructure, and capitalizing on sector-specific advantages, to create an inviting environment for companies and maintain Europe's competitiveness in the global capital market scene.
- In light of the general-news about the intense competition between Europe and the U.S., it's crucial for European exchanges, including Basel, to expedite decision-making, reinforce leadership, and embrace technological innovations to maintain a competitive edge in capital markets.
