Pricing of Settlement Link Services and Mergers of Central Securities Depositories
40 Pages Posted: 19 Jan 2007
Date Written: January 2007
Abstract
This paper tries to contribute to the discussion on the role of securities settlement infrastructures for financial integration in Europe. It presents a model that can explain a well-known stylized fact of securities settlement, the surprisingly high fees charged by central securities depositories (CSDs) for settlement through links between CSDs. As the model turns out to provide a robust explanation for this stylized fact, it is then used to analyzes an important policy question, the welfare effects of mergers of CSDs.
Keywords: Securities settlement, link settlement fees, central securities depositories
JEL Classification: G21, G15, L13
Suggested Citation: Suggested Citation
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