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"We want there to be an electronic relationship in order to ease the movement of cross-border settlement".
Cross-border settlement, even via international depositories such as Clearstream and Euroclear, costs around ten times more than domestic settlement, according to some estimates.
Already, last month, Crest and Clearstream, a pan-European settlement house half-owned by Deutsche Börse, had said they would reduce the cost of cross-border settlement to domestic levels, a cut of up to 90%.
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Europe's banks may have to deal with up to 31 different national and cross-border clearing and settlement systems when trading in European shares and bonds.
A recent report for the European Commission on cross-border clearing and settlement, by the Giovannini group, concludes that these barriers add enormously to transaction costs for investors.
Britain's competition authorities have already said that Deutsche Börse or Euronext must sell some clearing holdings if they want to pursue the LSE.In the past, Mr McCreevy has favoured letting the market provide a solution on cross-border clearing and settlement, while noting that it remains costly and inefficient and puts "an unacceptably high burden on cross-border investment" in Europe.
Under the e-commerce tie-up, Alibaba subsidiaries in Japan and China are expected to manage functions like cross-border shipping, payment settlement, cloud computing services etc. E-commerce players like Amazon or eBay should be looking closely at what was established in the world's largest and third largest Internet market today.
In a related development, cross-border migration for settlement in a new country increased more than twice as rapidly as the world's population grew during the last third of the Twentieth Century [ 6].
It opened for business on November 17th and is offering retail stockbrokers cheap cross-border trading, clearing and settlement.Mr Cruickshank's ideas were boosted by a recent report on European financial integration.
There are other major problems for businesses and consumers making both cross-border and local payments: settlements can take weeks and cost more than 10percentt.
CapCo specializes in helping financial services firms tackle all of the back-office and risk-management problems involved with longer trading hours, shorter settlement cycles and cross-border trading.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com