When news first emerged that the Depository Trust & Clearing Company was pondering a bid for LCH.Clearnet, the logic seemed impeccable. And when the deal was finally announced last year, it still seemed to make good sense. But now many of the same banks that once gave their support appear to have had an epiphany. Why?

First, not all parts of the banks were quite so enthusiastic about the prospect of a combined DTCC/LCH.Clearnet. Those engaged in the cash equity business would have welcomed the deal unreservedly; the DTCC behemoth descending on Europe would have resulted in an immediate reduction in cash equity clearing costs.