The Future of Stock Exchanges in European Union Accession Countries

Author(s): Stijn Claessens, Ruben Lee, Josef Zechner

Report commissioned by The Corporation of London

Download this report for free in bookmarked PDF format

Summary: The objective of this paper is to investigate the future of stock exchanges in EU accession countries (EUACs). The report analyses the determinants of stock markets in EUACs, investigating the role of macroeconomic variables, financial reform, and other country factors. It next analyses the viability of EUAC stock exchanges in light of migration, describing and analysing the patterns, determinants and impact of foreign listing by corporations in EUACs over the last decade, and studying these firms relative to those listing only locally. It also analyses the impact on local liquidity. Using this analysis, the paper investigates the future of EUAC local exchanges, reviewing existing work on the structure and evolution of stock exchange trading systems. It provides an overview of recent trends in the consolidation of exchanges worldwide and links among EU exchanges. It draws possible implications for the future of stock exchanges in EUACs and discusses possible policy options.