The multinational stock exchange NYSE Euronext is going to merge with the German stock exchange. Germans and Americans will have most of the say in this mega-business, including at the Amsterdam stock exchange. On the floor of the stock exchange they may not not be aware of it, but historically the role of Amsterdam in the stock market is very important.
 
By Johan Huizinga and Philip Smet

Trading in shares is centuries old, and in 1602 the rich merchant city of Amsterdam was the setting for a truly mega transaction. At that time, trade in the Far East was very important for the Netherlands. Under the motto "unity is strength" the newly independent Dutch East India Company (VOC) was set up. The VOC was a merger of organisations that were already trading with East India, which later became Indonesia. This company needed huge start-up capital, and in the years that followed a lively trade began in VOC shares.

"The best way was to ask a lot of people to contribute to the initial capital of the Company," says economist and historian Louis Petram. "There was a huge response. The VOC collected a total of some 6.5 million guilders from registrants, a significant amount. The majority of the shares were held by the richer upper classes. The average shareholder invested between 500 and 3000 guilders in the VOC."

• Listen: Louis Petram explains how it all began

Today
Now, four centuries later, the stock exchange in Amsterdam is part of an international stock exchange company. The mergers began 11 years ago, when the Paris, Brussels and Amsterdam markets merged into Euronext. At the time it was a shock that the French had become part of the service in Amsterdam. But six years later, Euronext in turn merged with the New York Stock Exchange, NYSE. Then it was French nationalists who worried about US influence.

The German stock exchange in Frankfurt - the largest in Europe - is now battling to take over NYSE Euronext. Fierce competition is again forcing the markets to scale up, stresses economist and stock market expert Matthijs Bouman:

"There is competition from small markets that exist between banks and insurers. They operate outside the normal stock exchanges selling bulk stocks and bonds to each other. They can do it cheaper themselves. So the regular stock exchanges need to work together to reduce their overheads and sustain their business."

Exit the boss
For investors or companies who want to place shares on the stock exchange, virtually nothing will change. Investment banks and brokers were already obligated to find the stock market where they could make the best prices for their clients. Now it will be a bit cheaper for everyone. Perhaps the only real loser will be the director of the Amsterdam Stock Exchange.
 
"Financially speaking, the Germans and Americans will take over the European exchanges in Paris, Amsterdam, Brussels and Lisbon. The power will be equally divided between America and Germany. The final board will consist of equal numbers of Americans and Europeans. But, for example, the Dutch director of the Amsterdam Stock Exchange, who is still on the board of NYSE Euronext, will have to give up his executive chair.
 
From a historial point of view, that's a shame for a city that stood at the cradle of share trading.

(as)