According to City journalist Alex Brummer, “The informal word is that a deal between the Financial Services Authority [FSA in the UK] and the Securities and Exchange Commission [SEC in the US] would cement the FSA’s place as the listing authority in London and the SEC’s in New York.”

That would certainly remove the major barrier to a tie-up between one of the American exchanges and the London Stock Exchange. At a stroke, the Sarbanes-Oxley rule-based regulation would be taken out of the equation for firms listed on the London Stock Exchange.

Although this would remove the LSE’s main competitive advantage over Nasdaq, it would also clear the way for a takeover or merger.

While the New York Stock Exchange is of necessity hanging fire because of its top-to-toe reorganization, Nasdaq has hoovered up some 15 percent of LSE shares, creating a floor, under the price that may eventually be paid, of 1175p per share.

A takeover is beginning to seem inevitable unless London reacts by buying a smaller exchange to render it free of threat.