A German magazine is reporting that German stock Exchange, Deutsche Borse has developed a plan to merge with New York-based, NYSE Euronext.

The deal, which would create thw world’s biggest stock exchange group, would combine the businesses in a holding company in the Netherlands.

According to the report, Deutsche’s Chief Executive Reto Francioni, has presented his supervisory board with proposals for the merger.

The implications for the London Stock Exchange are not entirely clear, but must be worrying given the general economic climate.

An hour ago, the Bank of England duly obliged on expectations and cut interest rates by 100 basis points to two percent, the lowest figure since 1951.

Other central banks are slashing rates too.

Sweden’s central bank today cut its key rate by a record 175 basis points, to two percent, the largest since 1992 when the country famously nationalized its major banks.

New Zealand also announced a cut of 150 basis points to a five-year low of five percent. Further cuts are on the cards.

Indonesia made a surprise 25 basis-point cut to its rate, to 9.25 percent.

Yesterday, the Bank of Thailand cut rates by 100 basis points to 2.75 percent, some of which may have been due to recent political turmoil in the country.

On Tuesday, the Reserve Bank of Australia surprised markets with a 100 basis-point cut to 4.25 percent.

The European Central Bank is expected to cut again today, but signals are mixed. The Shadow ECB has called for swift, deep cuts from its current rate of 3.25 percent. However, voices close to the ECB warned not to expect them.

Chris Gibson-Smith, Chairman of the London Stock Exchange, is believed to be discussing the recruitment of a successor to Clara Furse, its gritty Chief Executive. The LSE is said to be using the services of a leading City search firm to oversee the appointment process.

There is apparently no formal timetable for Furse’s departure but she is unlikely to leave before next autumn at the earliest, and may even remain in place beyond the end of next year.

“Clara has been with the Exchange for eight years and it is natural that the board is thinking about succession planning,” said an insider, quoted by the Sunday Telegraph. “She remains fully committed to the completion of its integration with Borsa Italiana,” which the LSE merged with in 2007.

This move has come as a surprise in the City. During her time in charge, she has defended the LSE against a string of hostile takeover bids, earning her the nickname “Queen Clara”.

“Each of the bids was pitched above its current share price. The approaches included one from Macquarie, the Australian banking group, another from Nasdaq, the American technology exchange, and one from Deutsche Borse.”

Her determination to keep the LSE out of the clutches of foreign predators has, ironically, led to closer ties with overseas exchange groups. Large chunks of the London exchange are now owned by shareholders from the Middle East, while last year’s takeover of Borsa Italiana was one element of a wave of consolidation which has swept through the exchanges industry in the last two years.”

Successors are thought to include Massimo Capuano, the deputy chief executive of the LSE group, Doug Webb, the recently recruited chief financial officer, and Martin Graham, director of equity markets, who has led the growth of Aim, the LSE’s successful junior exchange.

The LSE has declined to comment on the search for Furse’s successor.

Trading on the LSE’s electronic platform was shut down this morning on one of its busiest days of the year.

The timing of the shutdown is unfortunate for the LSE, which is facing increased competition from rival trading platforms such as Turquoise, a Europe-wide platform set up by a number of the world’s biggest investment banks.

Another rival, Chi-X, claims to have taken over 15 percent of trading in FTSE 100 stocks recently.

To counteract the challenge, the LSE slashed trading fees at the start of this month in response to a partial launch of Turquoise, which is not due to start trading proper until October.

Today’s debacle was thought by the BBC’s Business Editor Robert Peston, to have serious consequences for the exchange. A great deal of money was tied up in the system, money that could not be used in a rapidly rising market.