However, it is still possible to rationalise further and there is considerable scope, in my opinion and the opinions of many others, for reducing transaction costs further, particularly in cross-border securities trading. The technological developments also inspire hope of reducing the time between trade and settlement. A situation where settlement could be made as soon as possible after the deal would be very welcome. This is because it would limit the risks the various counterparties have against one another. Most financial instruments traded in Sweden today are settled three days after the trade. It should be possible to reduce this period now, so that settlement is made one day after the trade. This would increase efficiency and reduce the settlement risks. If I act as visionary a moment, I can see that in the not too distant future settlement could in principle be simultaneous with trade, so that no time lag arose at all. There still remain some practical obstacles before this becomes a reality. However, I have every hope that these obstacles will be overcome in time. Another, equally important aspect of the technological developments is that they have made it easier for new operators to enter the financial markets. This has led to stiffer competition, which has put further pressure on transaction costs. Technological developments affect competition in several ways. Improved information technology enables operators to offer customer more and cheaper services. The Internet has revolutionised both the spread of information and order systems.

This includes the closer linking of the stock markets in Stockholm, Helsinki, Tallinn and Riga through the establishment of OMX and - prior to this - the stock markets in Amsterdam, Brussels, Lisbon and Paris through EuroNext. An example of far-reaching integration in the clearing and settlement of securities transactions is Euroclear. The agreement on a merger of the Swedish and Finnish central securities depositories is another example of tendencies towards integration in the securities market. Understanding developments in the securities markets and what these in turn mean for the future requires an understanding of the economic driving forces behind them. Today I shall discuss some long-term trends that I consider of particular importance. These include changes in the population structure, the demography; technological developments; internationalisation; changes in ownership structure and - as I mentioned at the beginning - changes in what we usually refer to as the financial infrastructure. This refers to the financial markets' railways and bridges; all of the systems that enable financial transactions to be made and the data regarding them to be transported as efficiently as possible, for instance, stock markets, clearing and settlement systems. In addition to these economic driving forces, regulations play an important role for developments in the financial markets. Later on, the Director General of Finansinspektionen (the Swedish Financial Supervisory Authority), Ingrid Bonde, will give her views on the new EU regulations that are about to be introduced. I shall also touch upon this work and comment from the Riksbank’s perspective.