The Securities Custody Industry

63 Pages Posted: 26 Aug 2007

See all articles by Diana Chan

Diana Chan

Citigroup

Florence Fontan

BNP Paribas

Simonetta Rosati

Directorate General Market Infrastructure and Payments, Oversight Division

Daniela Russo

European Central Bank (ECB)

Date Written: August 2007

Abstract

Custody is, in essence, a service consisting in holding (and normally administering) securities on behalf of third parties. In step with the growth of sophisticated financial markets, custody has evolved into a complex industry no longer characterised by physical safekeeping but by a range of information and banking services. Given the multi-tier structure of the industry, custody services are provided by a variety of intermediaries. This paper describes the development of the custody industry and the structure of the custody services market. It also discusses the risks involved in custody and the challenges the industry is facing, particularly in the European context.

Keywords: custody industry, securities settlement, systemic risk, custodian banks, global custodians

JEL Classification: G15, G21, L22

Suggested Citation

Chan, Diana and Fontan, Florence and Rosati, Simonetta and Russo, Daniela, The Securities Custody Industry (August 2007). ECB Occasional Paper No. 68, Available at SSRN: https://ssrn.com/abstract=977359 or http://dx.doi.org/10.2139/ssrn.977359

Diana Chan

Citigroup ( email )

London
United Kingdom

Florence Fontan

BNP Paribas

Paris
France

Simonetta Rosati (Contact Author)

Directorate General Market Infrastructure and Payments, Oversight Division ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Daniela Russo

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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