"The European Securities Industry. Further Evidence on the Roadmap to Integration"

The integration of the European securities market is one of the most important and ambitious steps of the making of a unified financial system. This chapter shows why the issue of costs and competition between different trading and post-trading systems is the key point of future integration. In particular, the analysis starts with the roadmap set by the European Commission and the evolution of the regulatory approach towards the integration of the trading and post-trading sectors. It then reviews the results of the research on the main issues related to the integration of securities markets and comments on the present situation. In addition, some original measures of the explicit costs of trading for all main European exchanges are presented, adopting a bottom-up approach, which allows a comparison of the prices paid by different investors for different sizes of trades. The debate on fragmentation of different European post-trading systems is also briefly reviewed. The chapter concludes with some policy implications.