Horizontal and Vertical Integration and Securities Trading and Settlement
45 Pages Posted: 10 Dec 2004
Date Written: August 2004
Abstract
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: Suggested Citation
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