IN THE POPULAR Imagination, Americans work endlessly in the office while their European colleagues arrive late, have lunch in peace, and leave on time. If that were ever true, stock traders would never be included in the system. The opening hours on the European stock markets are among the longest in the world and keep the financiers at their Bloomberg terminals much longer than on American or Asian stock exchanges. Nevertheless, a proposal to shorten trading hours is making little progress.
The fact that European markets open early and close late partly depends on geography. Frankfurt, London and Paris (among others) are aiming for a kind of bridge between Asia, where the stock exchanges close when Europe opens, and America, which gets underway towards the end of its trading day. But that means eight and a half hours of trading from 9 a.m. to 5.30 p.m. That is two more than on the New York Stock Exchange, where far more shares change hands. Tokyo’s market is only open for six hours and is interrupted by lunch.
At the end of last year, trading groups representing investors buying shares and bankers selling them had jointly proposed to operators of European stock markets to shorten the working day. For example, opening an hour later and closing half an hour earlier would focus buying and selling in a shorter window. Far from reducing trading volume, the smaller and more liquid trading window could even lead to more activity.
Starting an hour later and ending a little earlier would be less stressful for traders who have to be at their desks at least an hour before the market opens. This could attract more diverse employees, especially women, not only in retail but in all related finance jobs. The pulse of the financial day – when companies publish results, for example – is partly determined by when markets open and close.
Overall, however, the stock exchanges are not enthusiastic. In the past few weeks, they have either immediately rejected the idea or thrown it into the long grass. They argue that it would be more difficult for private investors to place their orders outside of their own working hours. The overlap with Asia is minimal, but it gives Europe a special status in the financial world, even if the markets of the old continent lose their relative importance. And if the days are too long for traders, maybe they could just work in shifts instead.
Surprisingly, the urge comes from the Anglo-Saxons of the city after shorter hours. The London Stock Exchange is the only stock exchange that has responded warmly to the field for shorter days. This could be because London opens an hour earlier at 8 a.m. to synchronize with the continental exchange. And hours will only be cut if everyone agrees to do the shift at the same time.
One reason for the reluctance of exchanges is that they fear that banks will endeavor to bring buyers and sellers of shares together, as is the case outside of trading hours. Many investors may even wonder if people need to be involved, as most financial transactions today are done by machines. Meat-and-blood traders who fish for shorter hours may soon find that they will not work at all. ■
This article appeared in the Finance & Economics section of the print edition under the heading “Downtime”.