High settlement costs are engendering self-reliance

Reduction of outward liquidity flows and crossing trades internally can help profits

Monday 5 November 2001 at 16:00

Portfolio traders are used to dealing with an array of variables when pricing and executing complicated transactions involving heavy volumes of securities. But they also must deal with a pair of niggling constants.

The disproportionately high cost of settling cross-border trades in Europe, coupled with increasing competition among banks and brokers, is pushing portfolio trading desks to become more self-reliant in their search for a solution that will both lower their overheads and create competitive advantage.