The fifth edition of the ECGI Research Newsletter focuses on capital market competitiveness. There is a widely-held view in America, shared to some extent and with no little delight in Europe, that US capital markets might have become less competitive. If this is true, is it caused by the corporate governance reforms introduced in the USA after Enron, in particular by Sarbanes-Oxley? Is this surprising? One would expect capital markets with stronger corporate governance regulation to allow capital to be raised more easily and cheaply. Did this new US regulation however go too far and introduce counterproductive measures? Perhaps there are forces other than corporate governance regulation at work: technology; the governance of stock exchanges themselves or the trust investors place in financial institutions?
On the other hand, is there anything Europe can feel smug about when it comes to enforcement? The United States brings more enforcement cases, putting more people in prison and handing out more fines than all 27 EU states combined. Then again, does Europe really lag behind the U.S. on enforcement or does it have more efficient regulation that simply requires less enforcement? And is European enforcement itself more efficient, achieving more with less?
These and other questions are covered in six recent research working papers published by the ECGI which are précised in this newsletter.
ECGI newsletter on capital market competitiveness
© Graham Bishop
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