Cost Efficiency in the European Securities Settlement and Safekeeping Industry

Financial Institutions in the Global Financial Crisis

“…Our results support the view of Van Cayseele (2004) that contestable quasi-monopolies might be the most efficient industry structure among the feasible ones in clearing and settlement. The literature finds the presence of economies of scale in clearing and settlement (e.g., Van Cayseele and Wuyts, 2007). Clearing and settlement institutions can then exploit economies of scale through growth (either organic or through mergers or acquisitions).…”

“…For example, Schmiedel, Malkamaki, and Tarkka (2006) focus on the factors of economies of scales and technological development. Van Cayseele and Wuyts (2007) find that economies of scale exist in European clearing and settlement; however, they are exhausted far below the size of the entire European market. This dissertation analyzes the competitive conditions in the clearing and settlement industry.…”

“…Van Cayseele and Wuyts (2007) find that economies of scale exist in European clearing and settlement; however, they are exhausted far below the size of the entire European market. Schmiedel et al (2006) show that the level of economies of scale varies by the size of a clearing and settlement institution.…”

“…To our knowledge, we are the first to analyze competition in the clearing and settlement industry using the PR model, Lerner index, and Boone indicator, which have frequently been applied in the banking literature (Angelini and Cetorelli, 2003;Bikker, Spierdijk, and Finnie, 2006;. Previous studies provide empirical evidence on the existence of economies of scale, relative efficiency, and technological development in clearing and settlement and in stock exchange markets (Hasan and Malkamäki, 2001;Schmiedel, 2001;Hasan et al, 2003;Hasan and Schmiedel, 2004;Hasan, Schmiedel, and Song, 2012a;Van Cayseele and Wuyts, 2007). 42 We analyze the competitive environment and the factors that affect competition in the clearing and settlement industry.…”

Integration, regulation, and policy of securities market infrastructures in the euro area

“…The empirical literature and cost studies in this area confirm that the current arrangements in the European securities market infrastructure are less than optimal, therefore, suggesting that there is a relatively high potential for cost saving especially as far as cross‐border clearing and settlement in Europe are concerned (Hasan et al , 2003; Hasan and Schmiedel, 2004; Lannoo and Levin, 2001; Schmiedel et al , 2002; Van Cayseele and Wuyts, 2005). Economies of conglomeration and critical mass are likely to favour centralisation and consolidation of European trading, clearing and settlement systems.…”