Plumbers and Visionaries: Securities Settlement and Europe's Financial Market(437 The Wiley Finance Series)

Table of Contents:
List of Tables and Figures ix Preface xi Part I New problems. New solutions 1 1 Settling Securities Across Borders 3 1.1 Turnover in the trillions 3 1.2 Process and players 9 2 The Eurobond Market and the New York Settlement Crisis 17 2.1 Autostrade shows the way 17 2.2 Foreign dollar bonds and their settlement 19 2.3 From Autostrade to the New York settlement crisis 20 2.4 The AIBD 23 2.5 Settlement services in Luxembourg 25 3 The ICSDs – Euroclear and Cedel 29 3.1 Closings in Brussels 29 3.2 The creation of Euroclear 31 3.3 Establishing Cedel in Luxembourg 35 3.4 Cedel’s success 37 3.5 The wider settlement picture 39 4 Euroclear Fights Back 43 4.1 The sale of Euroclear to its users 43 4.2 Difficult days 45 4.3 Commitment to investment 48 4.4 Euclid 51 4.5 Securities lending and borrowing 52 4.6 The Bridge 54 4.7 Prospering in difficult times 55 Part II Winds of Change 61 5 New Markets, New Tensions 63 5.1 Caviar and champagne 63 5.2 The 1980s – Deregulation and securitisation 66 5.3 Diversification at Euroclear 72 5.4 The Belgian cooperative 76 6 After the Crash 79 6.1 Strengthening cooperation and national systems 79 6.2 European considerations 82 6.3 American influences 84 6.4 Central bankers push for DvP 87 7 The Coming of the Euro 91 7.1 A world transformed 91 7.2 Beyond G30 92 7.3 The EMI and Lamfalussy 94 7.4 The growth of repo activity 97 7.5 The ECB and securities settlement 100 Part III An Industry in Ferment 105 8 The Rivals 107 8.1 Euroclear and the boom in domestic markets 107 8.2 Lussi and the revival of Cedel 116 9 Change at the Exchanges and CSDs 123 9.1 Investment and consolidation 123 9.2 Seifert in Frankfurt – a story of vertical integration 125 9.3 Th´eodore in Paris – innovation through IT 129 9.4 Taurus and CREST – a horizontal system by accident 133 9.5 The Swiss Value Chain 135 9.6 Different blueprints 136 10 Corporate Manoeuvrings 141 10.1 Pressure for change 141 10.2 A European clearing house? 143 10.3 A meeting of minds in Marrakech 144 10.4 Dark days for Euroclear 146 10.5 The fight back begins 147 10.6 The French defect 149 11 Euroclear Transformed 151 11.1 Euroclear separates from Morgan 151 11.2 The creation of Euronext 156 11.3 Euroclear acquires Sicovam 158 12 Seifert’s Silo 163 12.1 A flurry of initiatives 163 12.2 Lussi’s fortunes ebb 165 12.3 Lussi’s downfall 167 12.4 The banks change tack 170 12.5 Seifert secures Clearstream 171 13 Europe with Two Settlement Models 175 13.1 Euroclear acquires CREST 175 13.2 A sub-optimal outcome 179 13.3 Embedding the vertical and horizontal models 182 13.4 LCH and Clearnet merge 184 13.5 Fair & Clear 186 13.6 Changes in structures and governance 187 Part IV An Issue for Europe 191 14 The EU Reacts 193 14.1 The Lisbon Agenda 193 14.2 The Lamfalussy Committee of Wise Men 194 14.3 The Giovannini Reports 196 14.4 The cost of fragmentation 200 14.5 The Commission responds 201 14.6 The Andria Report 203 14.7 The ESCB/CESR standards 203 14.8 The G30 and EFR Reports 205 14.9 MiFID 206 14.10 The Commission’s second communication 207 14.11 The arrival of McCreevy 208 15 Setting Parameters 213 15.1 Algorithms and exchanges 213 15.2 Seifert and the law of unintended consequences 215 15.3 Exchange consolidation: an unpredictable catalyst 217 15.4 Competition authorities turn against silos 218 15.5 Competition and interoperability 220 15.6 For and against a single CCP 222 15.7 User discontent 224 15.8 Change at Euroclear 227 16 Work in Progress 233 16.1 Euroclear’s domestic market for Europe 233 16.2 Cesame and dismantling the Giovannini barriers 238 17 Frameworks for the Future 243 17.1 Two solutions at once 243 17.2 The code of conduct 244 17.3 Target2-Securities 250 17.4 T2S – the follow-up 254 17.5 Questions and more questions 259 18 Conclusions and Reflections 265 Appendices 271 A References and bibliography 271 B Key dates for the securities settlement industry in Europe 279 C Who’s who in the history of European securities settlement 291 D Glossary of technical terms 311 E Postscript 329 Index 333

About the Author :
Peter Norman is a London-based journalist and writer, specialising in European issues. He began a career in journalism in 1968 as a trainee for Reuters Economic Services in London. He later worked for The Times (of London) and The Wall Street Journal-Europe before joining the Financial Times in 1988 with responsibility for the newspaper’s UK and international economic news coverage. He spent 22 years of his professional life on the European mainland based at various times in Frankfurt, Bonn and Brussels. After three years in Bonn as the FT’s chief correspondent in Germany, he moved in 1998 to Brussels as bureau chief and chief EU correspondent. He has combined book authorship and journalism since returning to the UK in July 2002. Plumbers and Visionaries: Securities Settlement and Europe’s Financial Market is his second work of recent European history.

Review :
"...will interest specialists, general readers and fans of detective fiction... grippingly relevant to current economic circumstances"  (Financial Times, Monday 7th January 2008) "virtually the only book to cover this arcane subject comprehensively, it is an essential complement for any financial market’s library." (Financial World, February 2008) "...a comprehensive and exhaustively researched study.." (Speed, Vol. 2) “Norman has produced a history of EU clearing and settlement systems” (European Voice, Thursday 14th February 2008) “...deserves to become compulsory reading for regulators and policy makers everywhere." (Global Custodian, Spring 2008)