The Merger of NYSE Euronext and Deutsche Börse AG: A Lesson in Financial Literacy

| February 16, 2011

A merger agreement has been announced for NYSE Euronext and Deutsche Börse to combine their holdings of all shares and securities to create the largest trading market.  No doubt this is greeted with welcome and certain wariness by American investors.  Understandably, Frankfurt and New York want to cut the costs of operations as the two largest markets face stiff competitions from the London Stock Exchange, the Tokyo Stock Exchange, and other major markets.  As an educator who invests, my question is, how do we bring this to the classroom?  Economics news contains a wealth of mathematics and speaks volume on how humans rationalize their behaviors.  This upcoming merger is no ordinary news, as global security markets become more and more integrated, the need for mathematics and financial literacy becomes more pertinent.

I grew up in the “American Century,” believing in American exceptionalism – its model of market economy was capitalism par excellence, copied worldwide. Today, I witnessed a waning of the mighty American financial empire as it relegates a small but real part of its dominion eastward to Frankfurt.  Lesson of life: be fast, be nimble, or be outcompeted.