Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152861
Authors: 
Kauko, Karlo
Year of Publication: 
2005
Series/Report no.: 
ECB Working Paper 427
Abstract: 
Central securities depositories (CSDs) 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. The domestic CSD can determine the cost efficiency of the rival by charging suitable fees, and prevent it from becoming more competitive than the domestic CSD. By inviting the competitor the domestic CSD can commit itself not to charge monopoly fees for secondary market services. This enables the domestic CSD to charge high fees in the primary market without violating investors’ participation constraints.
Subjects: 
access pricing
central securities depositories
network industries
securities settlement systems
JEL: 
G29
L13
Document Type: 
Working Paper

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