LONDON, Mar 2 Reuters Banks and asset managers have set up a new taskforce to study whether Europe should keep up with Wall Street by halving the time it takes to settle share trades.

The U.S. Securities Exchange Commission last month decided to cut the period for settlement or final leg of a trade, to one working day, known as T1, from two working days, the current lag in Europe.

Halving settlement in Europe would mean banks and asset managers having to reconfigure their IT systems at a cost.

With the U.S. having announced its intention to move to T1 settlement by May 2024, the discussion on whether Europe should follow suit has become more pressing, said Adam Farkas, chief executive of the Association for Financial Markets in Europe AFME.

Last September, AFME poured cold water on an idea that would require agreement between the European Union, Britain and Switzerland to avoid fragmenting share trading.

The SEC has said that T1 would make markets more resilient to the type of volatility seen during COVID19, and the meme stocks phenomenon on Wall Street in 2020, when social media sites fuelled heavy trading in companies like GameStop.

T1 cuts the amount of time brokers have to tie up capital and margin to cover unsettled trades, and failure to follow suit could put Europe at a competitive disadvantage to Wall Street.

The taskforce will look at whether Europe should adopt T1 and if so, when in a bid to shape regulatory thinking.

Given heavy transatlantic share…