Parallel with the move towards vertical integration, the internationalisation of the capital markets and harmonisation of laws and rules within the EU has led to increased pressure to consolidate operations across national borders. In many cases there have previously been legal barriers to international consolidation. Now that the barriers are gradually being removed, competitive pressure on the existing national infrastructure companies is increasing. At the same time, there are stronger incentives for cooperation and even mergers between stock markets in different countries and also between clearing and settlement organisations. In other words, there are also tendencies towards horizontal integration. The question of what is most beneficial for the functioning of the economy as a whole - vertical integration or horizontal integration - is not an easy one. In both cases there are benefits from economies of scale. There are also concentration tendencies, which can in turn lead to deficiencies in competition in the markets for trading and clearing securities. I believe that it is extremely important that we authorities - and I mean here financial supervisory authorities, competition authorities, ministries of finance and central banks - closely monitor developments in this field. The public authorities' supervision and oversight of the financial infrastructure is also affected by how the infrastructure companies are owned. When these are run as profit-making limited companies with external owners, there is an evident risk of monopolistic pricing. Here the Swedish Competition Authority has a difficult but important task.

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.