Integration of Securities Market Infrastructures in the Euro Area

50 Pages Posted: 3 Aug 2005

See all articles by Heiko Schmiedel

Heiko Schmiedel

European Central Bank - Securities Settlement Systems Policy Division

Andreas Schönenberger

European Central Bank (ECB)

Date Written: July 2005

Abstract

This paper investigates the state and process of integration of the European securities market infrastructure. The integration of financial infrastructures is one of the basic policy goals and key responsibilities of the Eurosystem. The paper finds that, despite the single currency, the euro area securities infrastructure remains highly fragmented and insufficiently integrated. There are still a high number of providers for trading, clearing and settlement, and they are not efficiently connected to one another. The paper also finds that the degree of consolidation varies among different integrated groups of market infrastructure. Economies of scale and scope and positive network externalities inherent in the securities services industry mean that substantial cost savings and increased efficiency can be expected from further integration. The most relevant factors underlying the less advanced areas of integration are likely to be not only persistent cross-border differences in tax regimes, procedures and laws, but also vested interests among users, owners and managers. Current work at the Eurosystem level can be expected to be helpful in promoting further integration.

Suggested Citation

Schmiedel, Heiko and Schönenberger, Andreas, Integration of Securities Market Infrastructures in the Euro Area (July 2005). ECB Occasional Paper No. 33. Available at SSRN: https://ssrn.com/abstract=752093

Heiko Schmiedel

European Central Bank - Securities Settlement Systems Policy Division ( email )

Directorate General Payment Systems
Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany
+49-69 13 44 70 59 (Phone)
+49-69 13 44 60 00 (Fax)

Andreas Schönenberger (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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