Changes in the Structure and Dynamics of European Securities Markets

Abstract

This paper starts with an overview of the structural changes which have affected the European securities markets for the last ten years. Then we present the essential features of the trading structure of six European financial marketplaces, ranging from the North to the South. Both stock and derivative markets are analysed, with a particular emphasis on their newly acquired information technology infrastructures. Automated trade execution systems and market making are briefly discussed, in order to examine the future of European organised capital markets in view of the possible Monetary Union of 1999. It seems that in the meantime the competition between exchanges will be tough although the actual technologies and structures are converging faster than expected. To gain market power, institutions have to make strategic decisions. The ability to exploit them, however, depends ultimately on the self-interest of their members.

JEL Classification: G15