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. there are also reasons for closer study of the potential threats to the stability of the financial system arising from such developments. finansinspektionen and the riksbank play important roles here. if the infrastructure is instead mainly owned and run by the users, the problems may not primarily concern pricing, but rather how the conditions for changing established structures are affected. here i am thinking of the incentives for new developments and the possibilities for new participants to become established in the market. this is extremely important to avoid rigid structures in the financial markets. the conclusion is that it must be possible to adapt the rules and supervision governing the companies working in the financial infrastructure to the organisational form chosen by the companies. in a changing world, our task is to ensure we employ the best methods for carrying out our supervision and oversight work. the picture is further complicated by the fact that the authorities in different countries become involved when consolidation work crosses national boundaries. eu regulations another important driving force for change is the new regulations being produced within the eu, arising from the financial services action plan of 1999. one of the purposes of these plans was to harmonise regulations for securities trading between the different european countries. the eu has decided to introduce what is known as the lamfalussy process to achieve the target of implementing all parts of the plan prior to 2005. this entails the eu parliament and council providing framework directives on issues of principle, while the commission chisels out the details in follow - up directives and regulations. after this, a group of representatives of the countries'different supervisory authorities will adapt the interpretations of these directives. this plan can be regarded as a building stone of the lisbon strategy - the ambitious target set at the summit meeting in lisbon in march 2000 - which aims to make the european economies “ the world ’ s most competitive and dynamic knowledge - driven economy by 2010 ”. an admirable ambition, although it could possibly have been worded more modestly. harmonising regulations and strengthening competitive advantage in the european economies is a commendable aim. increased harmonisation simplifies price comparisons and thereby strengthens competition between producers of financial services. if these producers also become competitive internationally, there will be benefits for both domestic consumers and shareholders in these countries. i nevertheless wish to say a few words

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. physical distances have lost significance as a result of these developments, which promotes cross - border securities trading. however, cross - border transactions are still unnecessarily dear. as i said, there is reason to hope that transaction costs can be pushed down further as cross - border trading becomes smoother. increased internationalisation cross - border trade is part of an increasing internationalisation process in the financial markets. over the past ten years, both non - resident ownership of swedish securities and trading by non - resident investors in swedish securities have increased. at the same time, swedish investors have invested more of their capital abroad. the internationalisation of capital is a development welcomed by the riksbank. it entails both improved risk spreads and the opportunity for higher earnings. in addition, it could lead to better competition and more efficient use of capital in the economy and thereby to greater welfare. this development also makes greater demands on the swedish securities markets. if we diverge too much from international practice with regard to norms and regulations, particularly tax regulations, it will reduce the economic benefits we obtain from the internationalisation of the markets. however, it does not mean that we should stop thinking about designing regulations. i shall return to this later. altered ownership structure another trend that affects the securities markets is the increased institutional ownership. when an increasing share of financial savings in the economy is through mutual funds and large financial institutions, securities trading is also affected. financial intermediaries are often more focussed on short - term earnings than private investors