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Building a Transatlantic Securities Market

Author: Benn Steil, Senior Fellow and Director of International Economics

Building a Transatlantic Securities Market - building-a-transatlantic-securities-market

Publisher Council on Foreign Relations

Release Date December 2002

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Overview

This authoritative report urges a United States-European Union accord on transatlantic exchange access to jump-start integration of each side’s mammoth securities market. According to the report, written by a leading authority on exchanges and market regulation, such an accord would significantly cut transatlantic trading costs as well as the cost of capital for American and European companies.

Published in cooperation with the International Securities Market Association, Building a Transatlantic Securities Market argues that unnecessary regulation inflates trading costs for U.S. investors in Europe and vice versa. The report proposes an innovative regulatory regime based on mutual recognition, allowing exchanges authorized on one side of the Atlantic to give direct trading access to professional investors on the other side.

The Transatlantic Business Dialogue has highlighted the removal of impediments to capital flow and coordination of financial architecture as their priority issues for 2002. This report confronts the challenge head-on, crafting a highly practical mechanism for achieving these aims swiftly and effectively. The report analyses the economic impact of the recent expansion of automated trading networks and concludes that the benefits of U.S.-EU market integration far outweigh those of the current EU initiative to liberalize intra-European market access.

More About This Publication

Benn Steil is acting director of the Maurice R. Greenberg Center for Geoeconomic Studies and senior fellow in international economics at the Council on Foreign Relations. He also serves as editor of International Finance.