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Christopher Kalbhenn, Börsen-Zeitung: “Eurex set our century’s standards for trading derivatives on exchange“

Release date: 25 Sep 2018 | Eurex Exchange, Eurex Clearing

Christopher Kalbhenn, Börsen-Zeitung: “Eurex set our century’s standards for trading derivatives on exchange“

Role reversal: while Christopher Kalbhenn, editor for finance at the German newspaper “Börsen-Zeitung”, usually is the one to ask us questions we thought that Eurex’ 20th anniversary is the perfect occasion to turn things upside down and the interviewer into the interviewee. 

Christopher, when did you first hear the name Eurex?

I don’t actually recall when I first heard the name Eurex. But what I do remember is that I was at ICDA’s Bürgenstock Meeting when the merger between Deutsche Börse and Schweizer Börse was announced. The merger was the first cross-border merger of exchanges in history – Eurex created a milestone there.

Over the years, how would you describe Eurex’ development?

The development of DTB or, after the merger with the Swiss SOFFEX, of Eurex was sensational: originating from what was basically a developing country when it comes to derivatives, this newcomer first managed to cut out the LIFFE from bund future trading and thus to become the largest European derivatives exchange. Shortly afterwards, it took over being the world’s highest-volume exchange from the Chicago Board of Trade only to then achieve a turnover level no derivatives exchange had ever achieved before. And with its technology, Eurex set our century’s standards for trading derivatives on exchange.

So the focus on technology right from the start played a large role?

Yes, definitely. Eurex had the advantage to start off with electronic trading and profit-orientation. The then-established derivatives exchanges in the United Kingdom, France and the U.S. were open outcry or trading floor exchanges and, moreover, organized cooperatively. The latter made their transition to electronic trading harder. Then again, the exchanges’ leaders failed to recognize that electronic trading was the future – looking back, this is highly surprising considering the then dawning internet age.

In your opinion, what other aspects were important in Eurex’ development?

The EU Pass provided the possibility for participants from other countries of the European Union to trade Eurex products – and it was also possible technically due to Eurex’ electronic network. Moreover, due the convergence of German and French bond yields before the introduction of the Euro, French bonds could also be hedged with products like the Bund Futures. This was how the Paris MATIF lost its bond future business to Eurex.

How do you see Eurex today?

Eurex no longer has the world’s largest volumes – but this does not have anything to do with losing market share. One of the reasons is the merger between CME and Chicago Board of Trade into CME Group; they were the world’s highest-volume derivatives exchanges in the 90s. CME Group then also absorbed Nymex, the largest exchange for commodity derivatives. As electronic trading is the standard today there no longer is the large advantage of the 90s. And yet, Eurex still is a leader when it comes to technology, for example due to innovations such as real-time risk management.

… and looking ahead?

Because the interest rate in the Eurozone will soon increase and the time of unusually low volatility ends, Eurex has great cyclical perspectives. Moreover, Eurex has many opportunities for structural growth such as the clearing of EUR-denominated OTC derivatives.  


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