Horizontal and Vertical Integration and Securities Trading and Settlement

45 Pages Posted: 10 Dec 2004

See all articles by Jing Yang

Jing Yang

Bank of England

Jens Tapking

European Central Bank (ECB)

Date Written: August 2004


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 different types of consolidation. We find that 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 findings 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 Classification: G21, G15, L13

Suggested Citation

Yang, Jing and Tapking, Jens, Horizontal and Vertical Integration and Securities Trading and Settlement (August 2004). Available at SSRN: https://ssrn.com/abstract=576025 or http://dx.doi.org/10.2139/ssrn.576025

Jing Yang

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Jens Tapking (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314

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