Comment, Regulation and Investors' Trust in the Securities Markets

Tamar Frankel
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引用次数: 9

Abstract

Throughout history, the relationship between government regulation, investors' trust in the securities markets, and market prices has been a puzzle. Regulation is costly to issuers. Yet, in a bull market, when raising capital is easy, regulation relaxes and in a bear market, when raising capital is difficult, regulation tightens, often at the request of issuers. This paper suggests that investors view prices as surrogates of a fair and trusted market system. When they lose, they seek greater proof that the system is not ‘rigged.’ Regulation points to such assurances, as well as protection against cutthroat competition by securities distributors. This paper also suggests that after the recent market crash, even though investors seemed to stay in the markets, they did not actually do so. Those who invested in tax deferred plans could not escape the markets without paying a high tax penalty, so they moved within the mutual fund system to money market funds and bonds. Finally, this paper suggests that more than regulation may be needed to resurrect investors' trust today.
评论、监管与投资者对证券市场的信任
纵观历史,政府监管、投资者对证券市场的信任和市场价格之间的关系一直是个谜。监管对发行人来说代价高昂。然而,在牛市中,当融资容易时,监管会放松;在熊市中,当融资困难时,监管会收紧,通常是应发行方的要求。本文认为,投资者将价格视为公平可信的市场体系的替代品。当他们败诉时,他们会寻求更有力的证据,证明这个体系没有被“操纵”。监管规定指出了这类保证,以及防范证券分销商残酷竞争的保护措施。这篇论文还表明,在最近的市场崩盘之后,尽管投资者似乎留在了市场,但他们实际上并没有这样做。那些投资于延税计划的人如果不支付高额的税收罚款,就无法逃离市场,因此他们在共同基金体系内转向货币市场基金和债券。最后,本文认为,要在今天恢复投资者的信任,可能需要的不仅仅是监管。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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