I find it difficult to believe that the mutual fund companies’ growing interest in influencing boards of directors through the selection of board members or using other means would solve the fundamental problem of weak institutional ownership. We cannot therefore ignore the conflict of interests in indirect ownership. Changes in the financial infrastructure There are other important ownership issues in the securities market. Here, I am thinking in particular of corporate governance with regard to marketplaces, clearing houses and other systems used for trading financial instruments and which are part of the financial infrastructure. Many companies active in the financial infrastructure have traditionally functioned as cooperatives or been owned by their largest users. In some cases, these companies have been transformed into profit-making limited companies, where other parties than the users have gone in as important owners. Stockholmsbörsen is of course the most striking example of this. This development is not specific to Sweden. The same tendencies exist in the international securities markets. Otherwise, each country has traditionally had a separate organisation for each vertical stage of the transaction chain: a stock market, a clearing house and a central securities depository for the financial instruments. There has thus been a significant degree of centralisation at national level. The reason for this is of course that there are substantial economies of scale in these operations. The fixed costs for operating the systems are high, while the floating costs are low. Moreover, there are considerable network effects.

However, one interesting question is what effect the change in population structure will have on savings and on the securities markets in a few years time, when those of us born in the 1940s retire. We are a fairly large group from the baby boom years. The life cycle hypothesis assumes that we will sell large parts of our assets, which will lead to negative net savings. However, some studies indicate that pensioners may not consume their capital to the extent assumed. And of course, some people actually have something left to pass on to their descendants. One decisive factor for the future development of savings is how the pension system will function in practice and what responsibility the individual will have in the future for other parts of the traditional welfare system. Technological developments Another important driving force behind the securities markets is technological developments. These occur in several ways. Look, for example, at the current procedure for a securities transaction, from start to finish. The process from placing the order to buy or sell until the transaction is finally settled has become increasingly automated. I don’t just mean the actual trading, which has become increasingly electronic, but also the processes following on from this, namely clearing and settlement. Straight through processing, usually referred to as STP, is becoming more common. This involves the entire chain from placing the order to clearing and settlement being implemented without manual intervention. The increased automation has led to transaction costs falling.