Working Paper: NBER ID: w14476
Authors: Alberto Giovannini
Abstract: I describe the challenge of fully integrating securities markets in Europe by integrating the clearing and settlement functionalities. The initial condition is characterized by a multitude of standards, conventions, regulation and laws, which are inconsistent with a barrier-free post-trading environment. In addition, the current providers of post-trading services are mostly for-profit monopolies. The EU reform strategy is discussed in detail, and its performance so far is assessed. I argue that the special features of the post-trading industry may help understand the disappointing progress so far.
Keywords: European securities market; integration; post-trading services; clearing and settlement
JEL Codes: F3; F36; F59; G15; G2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lack of integration (F15) | Barriers to a seamless post-trading environment (D53) |
| Inconsistent standards, regulations, and laws (L15) | Lack of integration (F15) |
| For-profit monopolies in post-trading services (D42) | Hinders competition (L41) |
| Hinders competition (L41) | Lack of integration (F15) |
| Monopolistic practices (L12) | Obstructs effective clearing and settlement systems (E42) |
| Historical isolation of national markets (N23) | Persistence of barriers (F55) |
| Coordinated reforms (P41) | Mitigate barriers (I24) |