Keeping it local makes more sense, both politically and financially, writes Peter Verhaar.

One of the most interesting results of the local elections was the success of the local parties. It is no coincidence they did so well. I predict that local democracy is heading for a bright future.

What do I base this on? It’s two months until the European elections. In the coming months we will be told repeatedly about the number of decisions already taken on a European level. This will be worrying for some and the next logical step for others.

Take, for instance, the supervision of the big banks. After last week’s accord, the banking union is now an entirely European matter. More decisions like this will only increase the importance of local communities. It’s not the nation state that is due for a revival but the city-regions of Burgundian times.

Local initiatives abound in finance as well. VPRO news programme Tegenlicht went to Bristol in England to report on the success of the Bristol pound. You may scoff, but this kind of initiative looks very promising indeed, and so do the different kinds of crowd funding. I know. I took over an ING bank loan for the local baker and we’re both doing well out of it.

Local indices

Last week the news came that listed company TOM wants to introduce its own index. The NL20-index would have a much more local character. It makes sense. I really have no idea why the Egyptian group OCI should be listed in the AEX-index. AEX stands for Amsterdam Exchange Index and that is exactly what it should be, according to TOM. With the help of shareholder and private investment market leader BinckBank, Euronext’s final stronghold could very well crumble.

Private investors who want to spread their investments in Europe have two representative indices at their disposal: the Stoxx Europe 50 and the Stoxx Europe 600. What is missing is a number of local indices whose composition doesn’t change radically from year to year. The DOW changes very little and that is the reason for its success.

The Financieele Dagblad came to the wrong conclusion in its editorial. The paper thinks the TOM index is no longer very relevant: investors would do better to look to Europe. But I think this index is going places exactly because investors are looking for indices that keep it local.

Peter Verhaar was a co-founder of Alex investment bank and is now a financial columnist. This column first appeared on BNR Radio.