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Content archived on 2024-05-21

Microstructure of financial markets in europe

Objective

European financial markets are facing a dramatic change, which is characterized by the introduction of new financial instruments and trading systems as well as by merging or co-operation of exchanges. Moreover, important commodities like electric power can now be traded on exchanges. In order to assess these developments with regard to their impact on the functioning of the financial markets and the European economy as a whole a thorough empirical investigation of the European financial markets at the micro-level is a crucial prerequisite. The limited empirical evidence is largely restricted to the microstructure of U.S. exchanges and is not simply transferable to the European situation. The goal of the proposed network is the study of microstructure of European financial markets. This will be done on the basis of recently available data for various European financial markets at the transaction level (UHF-data): The special features of this type of data require the development of new econometric tools that combine methods from microeconometrics with methods from time series analysis.
Therefore the objectives are twofold:
( i) development of econometric methods for the analysis of ultra high-frequency data,
(ii) empirical analysis of the market-microstructure of various European financial markets based on these new techniques. Special emphasis will be given to the development of multivariate models for UHF-data to analyze the joint dynamics of volatility and liquidity of financial markets and the link between various markets. Finally, the network expects to provide a comprehensive empirical characterization of the microstructure of European financial markets that can serve as a background for policy advice regarding the design and restructuring of financial markets in Europe.

Fields of science (EuroSciVoc)

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Topic(s)

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Call for proposal

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Funding Scheme

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NET - Research network contracts

Coordinator

UNIVERSITAET KONSTANZ
EU contribution
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Address
Universitaetsstrasse 10
78457 KONSTANZ
Germany

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Total cost

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Participants (7)

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