CONSOLIDATION OF EUROPEAN FINANCIAL MARKETS
Dissertation Keywords: consolidation, integration of european stock exchanges
This Thesis Abstract | Dissertation Abstract may be cited as follows:
Thesis Abstract or Dissertation Abstract (Summary):
Pan-European trading, where European companies of various nationalities will trade on the same exchanges, will obviously happen, with Europe moving closer to financial and economic integration.
The single currency has been a key issue in Europe. This has given a boost to cross-border investment, encouraging people to view Europe as one market and to demand the infrastructure necessary to support its operation as a single market. Despite this appeal, most stock exchanges in Europe are national institutions that trade only local, country-specific stocks.
Having a fragmented solution in Europe has added to costs, specifically back office costs, since it has been necessary to interface with multiple exchanges, clearing houses and settlement systems.
Recently this market structure appears to be changing as an increasing number of stock exchanges are attempting to operate across national borders. There were several initiatives for mergers and acquisitions between stock exchanges in order to create a stock exchange that will offer trading in stocks from many European countries. However the formation of the pan-European Stock Exchange still appears far from a reality.
This paper will discuss the main obstacle to cross-border securities trading, how they can be overcome and the strategies that can be followed by European stock exchanges in order to achieve this consolidation. The paper will also put in doubt the creation of a single pan-European stock exchange as the best solution for a unified Europe.
Chapter 1 of the dissertation explains reasons for the consolidation of the European stock exchanges and the benefits that this will create.
Chapter 2 shows that there are also factors that impede the integration of stock exchanges in Europe and that they must be overcome in order to proceed and to make such integration more efficient.
Chapter 3 describes the projects of stock exchange and post-trading infrastructure integration that took place in Europe in the last decade. It also shows that there are new exchanges that evolved and that they are following the strategy of becoming pan-European stock exchanges. This chapter pays attention to both successful and unsuccessful projects. It explains why some projects failed.
Chapter 4 illustrates the scenarios (or form of consolidation) that can be followed by the European stock exchanges in the consolidation process. It shows the advantages and disadvantages of each of the scenarios.
Chapter 5 demonstrates that although in a competitive environment market forces push for the most efficient solution, certain amount of public intervention is needed (in addition to the national harmonisation in the fragmented legislation) regarding the form of integration that the European stock exchanges should pursue.
The final Chapter 6 analyses whether the establishment of single pan-European stock exchange is the best solution for Europe. It draws the attention to a single European stock exchange that has certain drawbacks.
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been submitted by Irina Violina on Sep 16, 2004 00:04. ©
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