| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5091189 | Journal of Banking & Finance | 2007 | 16 Pages |
Abstract
Central securities depositories (CSDs) in Europe have opened mutual links, but most of them are seldom used. Why are idle links established? By allowing a foreign CSD to offer services through the link, the domestic CSD invites competition. By inviting competition the domestic CSD can commit itself not to charge monopoly fees for secondary market services. This enables it to charge higher fees for securities issuance in the primary market. It is shown that commitment via an idle link can be optimal for a profit maximising CSD.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Karlo Kauko,