Trends in European Cross-Border Securities Settlement - TARGET2-Securities and the Code of Conduct

Securities settlement in Europe is still said to be highly inefficient for crossborder transactions. One reason can be seen in the technical barriers of the different settlement systems. This paper evaluates different models for the integration of European securities settlement. The central securitories depository-link model, the hub and spokes model, and the central European central securitories depository are models that aim to integrate the securities settlement. They have in common that they address the problem of interlinkages of national central securitories depositories and differ essentially in the way of achieving integration. These models and currently discussed approaches are introduced and the current status is presented. The models are systematically compared with each other considering transaction costs, risks, and the integration of the cross-border securities settlement process