Resource title

Barriers to European financial market integration: clearance and settlement of equities

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A prerequisite for the development of an international equity market that permits investors to achieve optimum asset-allocation and corporations to tap pools of capital most efficiently is a supportive transaction infrastructure comprising the clearance, settlement, payment and custody of cross-border. This infrastructure is the "plumbing" of the market, a structure that is composed of many different parts that must operate as a seamless and integrated system in order to achieve maximum efficiency for the end-users and thus promote the ultimate objective, optimum capital allocation. Blockages and discontinuities in the utilities that comprise the transactions infrastructure make themselves felt in the form of increased transaction costs. At present Europe, notably the EU, falls far short of having a functional transactions infrastructure for equity securities, and this will remain an important shortcoming as other dimensions of financial integration proceed

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1995/95-87.pdf

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Copyright INSEAD. All rights reserved