banks and security value chain.pdf

Banks and the Value Chain in the Securities Industry: The Italian Case Maurizio Polato and Josanco Floreani Udine University, Udine, Italy (E-mail: maurizio.polato@uniud.it, josanco.floreani@uniud.it) Abstract. The provision of investment services (and the correlated ancillary services) and collective investment services forms part of the main functions carried out by the securities industry. From an industrial point of view, all the activities defining the securities industry represent subsequent stages of the production process of the industry. The financial exchange sensu stricto uses the orders originating from the investment decisions produced in the asset allocation stages as input for the pro- duction process and, in turn, is divided into the order capture, order execution and order processing stages. The presence of banking intermediaries characterizes all the stages of the production process of the securities industry. This, of course, has implications in terms of profitability of the banking groups and affects their com- petitive strategies. Keywords: securities industry; investment services; asset management. JEL classification: G21, G23, G24. Introduction The provision of investment services (and the correlated ancillary services) and collective investment services forms part of the main functions carried out by the securities industry. The latter is defined herein as the body of parties who offer both exchange services (trading) regarding financial instruments (inner or exchange industry) and a latere services or those preparatory for trading. In more general terms, the securities industry (Bini 1988, p. 142) (a) achieves and organizes the trading of securities (inner industry); (b) encourages the improvement of the marketabil- ity of the financial instruments; (c) achieves and organizes the split distribution of the securities; (d) provides consulting activities on the financial instruments; (e) manages investment portfolios and, more gen- erally, asse