Competition between financial markets in Europe: What to expect from MiFID?

H.A. Degryse

Research output: Contribution to journalArticleScientificpeer-review

13 Citations (Scopus)

Abstract

The Markets in Financial Instruments Directive (MiFID) could be the foundation of new trading platforms in Europe. This contribution employs insights from the theoretical and empirical literature to highlight some of the possible implications of MiFID. In particular, we argue that more competition will lead to more liquid markets, reflected in lower bid–ask spreads and greater depth. It will also lead to innovation in incumbent markets and stimulate the design of new trading platforms. MiFID has already introduced more competition, as evidenced by the startup of Instinet Chi-X, the announcement of new initiatives, including Project Turquoise and BATS, and the reactions of incumbent exchanges.
Original languageEnglish
Pages (from-to)93-103
JournalFinancial Markets and Portfolio Management
Volume23
Issue number1
Publication statusPublished - 2009

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