Horizontal and Vertical Integration in Securities Trading and Settlement

47 Pages Posted: 22 Feb 2005

See all articles by Jens Tapking

Jens Tapking

European Central Bank (ECB)

Jing Yang

Bank of England

Date Written: November 2004


This paper addresses a very European issue, the consolidation of securities trading and settlement infrastructures. In a two-country model, we analyse 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 regard 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

Tapking, Jens and Yang, Jing, Horizontal and Vertical Integration in Securities Trading and Settlement (November 2004). Bank of England Working Paper No. 245, Available at SSRN: https://ssrn.com/abstract=670230 or http://dx.doi.org/10.2139/ssrn.670230

Jens Tapking

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314

Jing Yang (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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