Central Securities Depositories Regulation: The next systemic crisis waiting to happen?

Koen Vanderheyden and Tim Reucroft

Journal of Securities Operations & Custody, 2015, vol. 7, issue 3, 242-252

Abstract: Central securities depositories (CSDs) are essential infrastructures within the securities market. Historically, they were natural monop­olies serving many functions and providing many services, but now they are being regulated and their role closely defined, with some activities curtailed and then subjected to competition with the objective of forcing rationalisation and consolidation of the European post-trade landscape. The Central Securities Depositories Regulation EU (No. 909/2014) of the European Parliament and of the Council dated 23rd July, 2014 (CSDR) seeks to increase the safety and efficiency of securities settlement and settlement infrastructures. This paper will explore the likely impact of CSDR on the European landscape. The author’s view is that, instead of increasing safety and efficiency as CSDR is supposed to, the consequences will increase the systemic risk within the European capital markets. The question is whether CSDR will be able to solve more problems than it causes, and whether or not CSDR in fact may be the next systemic crisis waiting to happen.

Keywords: CSDR; systemic risk; issuer CSD; settlement internalisers; settlement fails (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jsoc00:y:2015:v:7:i:3:p:242-252

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