One or several financial centers? A comparative approach of the multipolar organization of Swiss stock exchanges

Since their inception, stock exchanges have been associated with the creation of wealth: they are considered as the basic infrastructure for trading financial and natural resources. The development of stock exchanges was at first closely linked to the economic development and growing prosperity of particular regions and financial centres. Nevertheless, the precise impact of financial deepening on economic growth is still discussed by economists.

As of today, globalization, political decisions, technological progress as well as financial innovations have led to profound changes of the regional importance of stock exchanges and their operations. Indeed, the demutualization and listing of exchanges, combined with the rise of alternative trading venues, have transformed this institutional foundation of Western capitalism. More precisely, the regional dimension of exchanges has declined in importance, while transregional and transnational aspects have become ever more important. This evolution has been neglected by the literature.

This panel aims to discuss how regional stock exchanges developed during the last two centuries. It will examine the close interactions between stock exchanges and their economic, financial and technological environment over time. In addition, the panel will also address how peripheral markets interconnect with core financial centres and how this interconnection has changed over time. Finally, it will consider relations of competition and cooperation between central and peripheral trading centers.

The development and evolution of Swiss stock markets may provide a relevant case study to answer these questions. Contrary to most European countries, the Swiss financial market was organized around several centers or 'poles' of relatively comparable importance at least before World War II. After 1945, the Zurich Stock Exchange definitively took the lead, but unlike the experience of other countries, such as the United States, France or Germany, the first stock market mergers occurred only in the 1990s. Between 1945 and 1996, the activity and volume of the Geneva and Basel Stock Exchanges continued to increase, despite fierce competition among them. This panel will thus discuss the reasons for and the consequences of this 'multipolar' organization.

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