LSE draws fire over Borsa synergies The London Stock Exchange's takeover of the Milan bourse five years ago "has not fulfilled expectations either in Italy or London" in terms of stimulating cross-border capital flows or increased investment in Italian companies, the Italian securities regulator has claimed. Guiseppe Vegas, head of Consob, said "the merger of the LSE and Borsa Italiana could be a good thing but it has not yet demonstrated good effects." The purchase of the Borsa by the LSE for €1.64bn was hailed at the time as creating "attractive cross-market access opportunities," enlarging the liquidity pool available to listed companies and "accelerating the development of the [small and medium-sized] market place." It was the UK bourse's first big strategic move after spending almost two years fending off a hostile approach from Nasdaq, the US exchange, and a takeover bid by Deutsche Börse. Mr Vegas said: "There are not many capital flows from Britain to Italy and from Italy to Britain. If I have the terrain and you have the seeds, you must give the seeds to me. His comments, in separate interviews in Milan and London, appeared to apply mostly to equities trading and capital-raising on the Borsa's junior board, Aim Italia. Like the larger Aim market in the UK and other small-cap boards, it has struggled to attract new listings since the 2008 crisis. Mr Vegas's remarks come as the LSE is benefiting from strong performance at the Borsa's MTS bond trading platform and as its Italian clearing house is delivering record earnings to the UK group. The LSE pointed out that the Borsa's revenues were 30 per cent higher in absolute terms since the acquisition, and that the number of listed companies had declined by 3 per cent in Italy since then, compared with a 19 per cent fall in the UK. Raffaele Jerusalmi, the Borsa's chief executive, said: "Despite a turbulent macro environment since the merger between Borsa Italiana and LSE, Borsa Italiana has thrived. Across our whole business we have seen benefits from our partnership, with new skills, and clients brought to both our businesses. Italy is to let its ban on short selling lapse on Saturday. Consob plans to announce a series of simplifications in the next few weeks, including stripping back some national rules that supplement European Union directives, known as gold-plating.