The European Securities Industry Under A Single Currency

Abstract

This paper examines the competitive dynamics of the securities industry in Europe and seeks to identify the major sources of competitive advantage for firms participating in the European industry in the future. It compares a variety of developments to date in the European market with those that have occurred in the United States over the past fifteen years to establish a benchmark position. It then attempts to assess what impact on the European securities industry the forthcoming adoption of a single European currency and Economic Monetary Union (EMU) will have. It restricts its examination, however, to the wholesale finance sector, focusing only on matters that effect markets for debt and equity securities that are issued or traded within Europe or across its borders, and related advisory services of investment banks and security firms. It does not address retail financial services, including brokerage in stocks, investment trusts or insurance, or retail banking services. Participants in the wholesale finance industry are broadly defined to include European universal banks and securities firms as well as all firms operating in Europe that are owned or controlled by non-Europeans. The aim is to create a composite picture of the European securities industry of the future and what will be required to succeed in it.