Economies of scale and technological development in securities depository and settlement systems
The paper investigates the existence and extent of economies of scale in depository and settlement systems. Evidence from 16 settlement institutions across different regions for the years 1993–2000 indicates the existence of significant economies of scale. The degree of such economies, however, differs by size of settlement institution and region. While smaller settlement service providers reveal high potential of economies of scale, larger institutions show an increasing trend of cost effectiveness. Clearing and settlement systems in countries in Europe and Asia report substantially larger economies of scale than those of the US system. European cross-border settlement seems to be more cost intensive than that on a domestic level, reflecting chiefly complexities of EU international securities settlement and differences in the scope of international settlement services providers. The evidence also reveals that investments in implementing new systems and upgrades of settlement technology continuously improved cost effectiveness over the sample period.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Litan, Robert & Rivlin, Alice, 2001.
"Projecting the economic impact of the Internet,"
Journal of Financial Transformation,
Capco Institute, vol. 2, pages 35-41.
- Gehrig, Thomas, 1998. "Competing markets," European Economic Review, Elsevier, vol. 42(2), pages 277-310, February.
- Giddy, Ian & Saunders, Anthony & Walter, Ingo, 1996. "Alternative Models for Clearance and Settlement: The Case of the Single European Capital Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 986-1000, November.
- Pirrong, Craig, 1999. "The organization of financial exchange markets: Theory and evidence," Journal of Financial Markets, Elsevier, vol. 2(4), pages 329-357, November.
- Schmiedel, Heiko, 2001. "Technological development and concentration of stock exchanges in Europe," Research Discussion Papers 21/2001, Bank of Finland.
- Hasan, Iftekhar & Malkamaki, Markku, 2001.
"Are expansions cost effective for stock exchanges? A global perspective,"
Journal of Banking & Finance,
Elsevier, vol. 25(12), pages 2339-2366, December.
- Hasan, Iftekhar & Malkamäki, Markku, 2000. "Are expansions cost effective for stock exchanges? : A global perspective," Research Discussion Papers 20/2000, Bank of Finland.
- Schmiedel, Heiko, 2002. "Total factor productivity growth in European stock exchanges : A non-parametric frontier approach," Research Discussion Papers 11/2002, Bank of Finland.
- Ian Giddy & Anthony Saunders & Ingo Walter, 1996. "Alternative models for clearance and settlement: the case of the single European capital market," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 986-1003.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpmi:0405001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.