Horizontal and Vertical Integration in Securities Trading and Settlement
47 Pages Posted: 22 Feb 2005
Date Written: November 2004
Abstract
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: Suggested Citation
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