Competition between clearing houses on the European market

Marie-Noëlle Calès (), Laurent Granier and Nadège Marchand
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Marie-Noëlle Calès: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique

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Abstract: For several years, European financial markets have been the place of important mutations. These mutations have hit both stock markets themselves as well as the infrastructures including all necessary services for the transactions on financial securities. Among the market services to which the investors appeal, is the clearing of the orders, the service which allows reducing exchanged flows while guaranteeing their safety. The market of clearing became strongly competitive with the arrival of new Pan European clearing houses. Confronted with aggressive pricing policies, "incumbent" clearing houses have to adopt new strategies : merger, simple or mutual links of interoperability. We develop a model of industrial organization to appreciate the consequences of these various strategies in terms of price and social welfare. The strategic incentives of clearing houses and their effects on their customers, i.e. investors, are observed by means of a sequential game. We show that the interoperability agreements are never reached at the equilibrium in spite of the fact that the "European code of good practice" of postmarkets incites them to accept this type of agreements. On the other hand, a merger between incumbent clearing houses can occur under some conditions. The merger is beneficial to these last ones as well as to the investors, but it is unfavourable to the Pan European clearing houses.

Keywords: bundling; clearing house; interoperability; merger; post-market organization; ventes liées; chambre de compensation; fusion; organisation des post-marchés (search for similar items in EconPapers)
Date: 2015-05-04
New Economics Papers: this item is included in nep-com, nep-eec and nep-eur
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00690901v2
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Competition between Clearing Houses on the European Market (2016)
Working Paper: Competition between Clearing Houses on the European Market (2016)
Working Paper: Competition between Clearing Houses on the European Market (2014)
Working Paper: Competition between Clearing Houses on the European Market (2013)
Working Paper: Competition between Clearing Houses on the European Market (2013)
Working Paper: Competition between clearing houses on the European market (2012)
Working Paper: Competition between Clearing Houses on the European Market (2012)
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