Xavier Rolet Falls On His Sword

The Telegraph reports that outgoing London Stock Exchange chief executive Xavier Rolet is to step down “with immediate effect” after a furious row between the company’s board and one of its shareholders over his departure.

Mr Rolet had been due to remain in his job until December 2018 but today said he had agreed to leave straight away, just one day after Bank of England Governor Mark Carney indicated that he did not back calls by one of the LSE’s biggest investors for him to stay on until 2021.

"We can’t envisage a situation where a CEO stays beyond the agreed period," Mr Carney said at a conference on yesterday, adding that he was “mystified” by the row.

The news follows weeks of acrimony between the board and Sir Christopher Hohn, founder of the Children’s Investment Fund (TCI), who accused the LSE’s chairman Donald Brydon of forcing Mr Rolet out against his will.

Mr Rolet said he was leaving amid “a great deal of unwelcome publicity” and would not be returning to the board or the job “under any circumstances”.

I will leave the final word to Francis Urquhart:

"Even the longest, the most glittering reign must come to an end someday."

LSE Suspends Trading

Share trading in London has been suspended all morning as a result of ongoing technical problems with the London Stock Exchange's prices data (initially, and incorrectly, described by the LSE as a "glitch").

The LSE had to close its Italian stock exchange operation close earlier in this week, because of technology problems.

LSE went live on Monday with a new technology platform called Millennium (a Sri Lankan design).

It would seem that more work needs to be done on the system, and that the LSE needs to explain as to why it went live without evidently being thoroughly tested in parallel with the old system.

London's Reputation Tarnished

London's reputation as the world's leading financial centre was further tarnished yesterday when the London Stock Exchange suffered its worst systems failure in eight years, forcing it to suspend trading for seven hours.

To add to the woes of those trying to trade yesterday the crash happened on what would have been one of the busiest days of the year, hot on the heels of the news over the weekend that Fannie Mae and Freddie Mac had been bailed out.

A cynic might argue that the system was deliberately shut down, so as to avoid a massive spike in bank shares occurring.

Reuters quoted one trader as saying:

"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible."

Another said:

"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning."

The LSE have not given an explanation for the crash, traders though are demanding an explanation.

LSE Chief Executive Clara Furse wrote to the FT on Monday, somewhat ironically, and said that the system used by the LSE was "the cutting edge".

This is just one of a string of issues that has tarnished the City's reputation. Other include; the endowment scandal, fat cat bonuses for failed executives, Northern Rock, excess bank and credit card charges, the mortgage drought, mis-selling of mortgages, PPI mis-selling etc.

The great and the good of the City should bear in mind that reputations are hard to earn, but easy to lose.