Horizontal and vertical integration in securities trading and settlement
نویسندگان
چکیده
This paper addresses a very European issue, the consolidation of securities trading and settlement infrastructures. In a two-country model, we analyze welfare implications of di¤erent types of consolidation. We nd that in our model, full technical horizontal integration of settlement systems is better than vertical integration of exchanges and settlement systems, but vertical integration is still better than no consolidation. These ndings have clear policy implications with regards to the highly fragmented European securities infrastructure. Keywords: Securities trading and settlement, vertical and horizontal integration, substitutes and complements. JEL Classi cations: G21, G15, L13. The views expressed in this paper are the views of the authors and do not necessarily reect the views of the European Central Bank or the Bank of England. We thank Charles Goodhart, Andy Haldane, Cornelia Holthausen, Harry Huizinga, John Jackson, Kevin James, Charles Kahn, Elias Kazarian, Will Kerry, Stephen Millard, Alistair Milne, Daniela Russo, Victoria Saporta, Hyun Song Shin, Elizabeth Wrigley, participants at the Bank of Englands Financial Stability Seminar, the Meeting of the EEA in Madrid 2004 and the conference of the Verein für Socialpolitik in Dresden 2004, members of the Securities Working Group of the Eurosystem and two anonymous referees for helpful comments and discussions.
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