TY  - UNPD
A1  - Juranek, Steffen
A1  - Walz, Uwe
T1  - Vertical integration, competition, and financial exchanges: is there grain in the silo?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2010,22
N2  - We investigate the incentives for vertical or horizontal integration in the financial security service industry, consisting of trading, clearing and settlement. We thereby focus on firms’ decisions but also look on the implications of these decisions on competition and welfare. Our analysis shows that the incentives for vertical integration crucially depend on industry as well as market characteristics. A more pronounced demand for liquidity clearly favors vertical integration whereas deeper financial integration increases the incentives to undertake vertical integration only if the efficiency gains associated with vertical integration are sufficiently large. Furthermore, we show that market forces can suffer from a coordination problem that end in vertically integrated structures that are not in the best interest of the firms. We believe this problem can be addressed by policy measures such as the TARGET2-Securities program. Furthermore, we use our framework to discuss major industry trends and policy initiatives. Keywords: Vertical Integration , Horizontal Integration , Competition , Trading , Settlement JEL Classification: G15, L13, L22
T3  - CFS working paper series - 2010, 22 
KW  - Vertical Integration
KW  - Horizontal Integration
KW  - Competition
KW  - Trading
KW  - Settlement
Y1  - 2010
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/20477
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-87109
IS  - This version: December 2010
ER  -