Transatlantic securities trading costs could be cut by up to 60% if protectionist regulatory barriers to exchange access are removed according to this report published by the International Securities Market Association (Isma).
The paper, authored by Benn Steil, director of international economics at the Council on Foreign Relations, urges an US-EU accord on transatlantic exchange access to jumpstart integration of the two mammoth securities markets.
The document analyses the economic impact of the recent expansion of automated trading networks, and concludes that the benefits of US-EU market integration far outweigh those of the current EU initiative to liberalise intra-European market access.
The report proposes an alternative mutual recognition regime that would allow exchanges authorised on one side of the Atlantic to offer direct trading access to professional investors based on the other.
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