Integration of European Securities Settlement Systems: A Transaction Cost Based Analysis of Models for Integration

e-Finance Lab Discussion Paper No. 10/2007

Posted: 19 May 2008

Abstract

Securities settlement in Europe is still said to be highly inefficient for cross-border transactions. This paper provides an overview of communication standards in securities settlement and discusses different models for integration of European securities settlement. SWIFT in combination with XML is establishing as standard for post-trade services. The CSD-link model, the hub in spokes model, and the central European CSD are models that go further in the integration of securities settlement. They have in common that they address the problem of interlinkages of national CSDs and differ essentially in the way of achieving the integration. These different models and currently discussed approaches are introduced and the current status is presented. The models are systematically compared with each other, considering transaction costs and integration of European cross-border securities settlement.

Keywords: Securities settlement, TARGET2-Securities, Single Settlement Engine, Communication standards, Transaction costs

Suggested Citation

Schaper, Torsten, Integration of European Securities Settlement Systems: A Transaction Cost Based Analysis of Models for Integration. e-Finance Lab Discussion Paper No. 10/2007. Available at SSRN: https://ssrn.com/abstract=1133392

Torsten Schaper (Contact Author)

Deutsche Börse Group ( email )

Frankfurt, 60485
Germany

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