These developments need therefore to be carefully observed by market participants and relevant authorities. c) Creation and dismantling of vertical “silos” In Europe, vertical silos encompassing trading, clearing and settlement infrastructures have been created, while other silos have been dismantled. The discussion on which structure is preferable is ongoing, and the answer may be different for different markets.
While silos may help infrastructure providers to reduce operating costs and to better coordinate the prices of the different integrated services (e.g. trading, clearing and settlement), they may reduce competition when they are misused, for example, to favour a central counterparty in the silo over its competitors outside of the silo.