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Although auditing standards instruct auditors to avoid issuing standardised key audit matters (KAMs), standard setters warn and financial statement users worry about expanded auditor's reports becoming sticky, generic and boilerplate over time. Based on textual analysis of expanded auditor's reports from the UK, I provide longitudinal evidence of an increase in various textual similarity measures including year‐over‐year similarity (stickiness), within‐peer group similarity (generality) and boilerplate language over time. Next, I identify a number of crucial drivers of convergence and find that disclosure similarity diminishes the positive capital market effect of precise KAM reporting documented in prior studies. Together, these findings suggest that audit firms have successively developed standard text modules for KAM reporting that undermine the aim of expanded auditor's reports to provide informative value. This paper extends the literature on the relationship between institutional environments and unintended effects of auditor disclosure regulation. [ABSTRACT FROM AUTHOR]

This article assesses the UK 's PISCES proposal, what it offers the UK, what that means for the EU as well as whether the EU co-legislators can, post-Brexit, perhaps look to emulate for something suitable and workable for the EU that is still looking to complete the Capital Markets Union (CMU). [ABSTRACT FROM AUTHOR]

We examine the capital market response to the publication of annual reports shortlisted for corporate reporting awards. We find weaker capital market reactions to the publication of shortlisted annual reports compared with a matched sample of non-shortlisted annual reports, consistent with shortlisted reports containing similar or less price sensitive information relative to non-shortlisted reports. Further analysis shows that firms publishing shortlisted reports are more likely to release information to investors in a timelier manner throughout the financial year. We complement our archival empirical analysis with interview evidence from FTSE350 executives and consultants to shed light on the motives for investing in high-quality annual reports. Collectively, our results support the view that high quality annual reporting reflects superior firm-level investor communication processes and that the broader corporate reporting cycle shapes the information role of firm reporting. [ABSTRACT FROM AUTHOR]

We examine the communicative value of extended auditor reports in the United Kingdom (UK), where ISA 700 (UK and Ireland) requires auditors to disclose the risks of material misstatement that had the greatest effect on the audit - key audit matters (KAM). By using methods from computational linguistics, we find that different proxies for communicative value (i.e., readability, evaluative content, visual aids, and specificity) improve in post-ISA 700 periods. Cross-sectional tests show that the improvement differs across audit firms and audit clients as well as KAM disclosure characteristics. Finally, broadly consistent with concurrent studies, we find no evidence that several proxies for communicative value are informative to investors. However, we find initial evidence that a more specific description of KAM is significantly and positively associated with capital market reactions, suggesting that investors value precise information. Overall, this study directly responds to the call for more research on how KAM are worded. [ABSTRACT FROM AUTHOR]

Financial auditing is one of the cornerstones of an effective capital market structure. When performed correctly, an independent financial audit provides investors with the security they need to effectively transact based on company disclosures. When this system fails, however, the results for investors and the economy as a whole can be devastating. In recognition of this danger, the market for financial auditing in the United States is regulated by a number of governmental and nongovernmental bodies charged with maintaining its health and effectiveness. But stakeholders within the U.S. market and government have criticized these regulators for failing to adequately respond to concerns lurking in the country's financial auditing system. While audit reform can be an expensive and convoluted process, this Note argues that U.S. regulators can streamline the field's development by monitoring and building upon the actions taken by U.K. regulators. This Note describes the current audit regulatory structure employed by the United States and examines the most pressing concerns expressed by interested parties. It then analyzes the findings and proposals offered in the U.K. Competition and Markets Authority's comprehensive report on competition and audit quality in the U.K. financial auditing market. This Note proposes that the conclusions of the Competition and Markets Authority's report should serve as both a warning and a guide for domestic audit regulators. The United States is past due for a comprehensive examination of their financial auditing system. Using the U.K. findings as a guide will provide more immediate and relevant data for policymakers and regulators alike. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to argue that the disqualification of directors, coupled with other liabilities to which they may be subjected, particularly in insolvency, should be sufficient to deter wrongdoing, because of the impact they tend to have on their personal and professional lives. It, however, argues that the "deterrence" effect would be dependent on the existence of other factors such as the efficient application of the law, publicity and post-disqualification monitoring. Design/methodology/approach: Using the UK as its primary case study, while also making reference to Nigeria and Turkey, this paper will show that while the existence of disqualification as a sanction exists in the first two countries, it is virtually absent from Turkey. And that while directors' disqualification provisions are routinely applied in the UK, they are hardly invoked in Nigeria, except perhaps with respect to listed companies, due perhaps to a lack of awareness of its existence or potency. Findings: This paper will conclude by making a case for a stronger application of the law, as it relates to directors' disqualification in the UK, call for an elaboration of the legal framework in Nigeria as well as the need for a public awareness of its provisions and potential impact and contend that Turkey should put in place a legal framework for directors' disqualification patterned also after the UK framework. Originality/value: The uniqueness of this paper stems from its tri-country focus. In that respect, the UK, which is a more advanced economy, with a robust and dynamic company law regime, is used as the primary case study, whereas at the same time, developments in Nigeria, particularly with that country's capital market, will be extracted and compared with the UK framework. Turkey, on the contrary, has been chosen as a case study mainly because it has no directors' disqualification mechanism in its legal system. Comparing directors' disqualification in one developing country, Nigeria, and a developed country, the UK and determining their upsides and downsides will be beneficial to Turkey in respect to establishing a deterrent effective disqualification mechanism on directors. [ABSTRACT FROM AUTHOR]

The green bond market helps to mobilize financial sources toward sustainable investments. Green bonds are similar to conventional bonds but are specifically designed to raise money to finance environmental projects. The feature of green bonds is the existence of greenium, or the lower yield compared to "conventional" bonds of the same risk. The relevance of the paper is underpinned by the mixed evidence on the existence of 'greenium', especially in corporate green bond markets; there has been limited research on the topic and a narrow focus on global, US, or Chinese green bond markets. Instead, the greenium in European debt markets remains underexplored. The objective of this study is to investigate the existence of greenium and its key determinants in European corporate debt capital markets, including the local markets of the United Kingdom (UK), France, Netherlands, and Germany. The sample included 3851 corporate bonds, both green and conventional ones, between 2007 and 2021 from 33 European countries. Linear regression was applied for the analysis. The results show that the climate corporate bonds in Europe are priced at a discount to the same-risk conventional corporate bonds. The magnitude of greenium is around 3 bps. Determinants of greenium include the presence of an ESG rating and belonging to the utility and financial industry. The remaining drivers of bond yields in the European corporate debt market are the credit quality (expressed by the level of credit rating), the coupon size, the bond tenor, the market liquidity, and macroeconomic variables (growth of gross domestic product and consumer price index). For the local corporate debt markets, our results are controversial. In all markets under consideration except for the UK and the Netherlands, we did not find sustainable evidence of greenium. The results of the research lead to a better understanding of the green bond market for investors, researchers, regulators, and potential issuing companies. [ABSTRACT FROM AUTHOR]

In capital markets, digitisation and cloud technology have catalysed opportunities for AI by enabling firms to collect, store and analyse larger datasets from a variety of internal sources than ever before. The past year brought greater regulatory activity around AI in the UK, EU and US than in any prior year, although regulatory regimes remain disparate. When considering legal issues that arise from use of AI, facets of multiple legal fields are relevant, albeit differing between jurisdictions, such as intellectual property rights frameworks and contractual areas such as data ownership, data rights, risk and liability allocation and compliance responsibilities. In this paper, the key legal considerations and recent regulatory developments are categorised into four actionable, international themes: (i) due diligence of data as an asset; (ii) effective organisational ongoing controls; (iii) intellectual property management; and (iv) third party contract and risk management. With so much in flux, we find that the best approach for now is to consider such themes and ensure robust governance, transparency and explainability of each of the AI systems, human oversight of the AI and contractual arrangements with third party providers. Perhaps ironically, 'getting AI right' is currently, to a large extent, more an art of human judgement than any formulaic compliance with rules. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to find out if corporate real estate ownership is priced into the capital market performance of non-property companies in the UK. This is of particular interest because ownership still represents a significant weight on the balance sheets and is predominantly considered unfavourable due to its bulkiness and difficult revisability in the event of changes in space demand. This draws attention to the UK as one of the most important European economies that have been exposed to strong uncertainties and dynamics, for example, due to the withdrawal voting of the United Kingdom from the European Union (BREXIT). Design/methodology/approach: A first look at the real estate assets reported in balance sheets provides insight into possible changes in ownership strategy. This serves as a basis for subdividing companies based on their real estate assets using a portfolio-based approach and that are then analysed using the Fama and French multi-factor model with regard to their influence on capital market returns. Findings: In general, the share of real estate assets has fallen over the past 10 years, although coinciding with BREXIT voting, some industries such as manufacturing show a turnaround. At the same time, ownership is priced in as a factor on the capital market, which applies to a sample across industries, as well as to separately considered sectors in the manufacturing and service industries. The pricing also shows a counter-cyclical pattern. Practical implications: Corporate real estate management should be aware of the negative influence of ownership, especially against the background of economic fluctuations. The reduction of ownership can reduce the associated cost of capital and increase company success. Originality/value: Previous UK-related studies mostly refer to a period before the global economic crisis in 2008, and therefore, are too old to reflect a changed view on corporate real estate ownership because of new corporate environmental conditions, based on inaccurate proxies or mainly refer to the retail segment. This research gap is closed. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to examine the association between two reporting mechanisms used by managers to communicate risk information to the capital market: risk disclosure and earnings smoothing. Design/methodology/approach: This study juxtaposes two competing hypotheses, the "opportunistic" and the "signaling", and empirically investigates whether one dominates the other for a sample of large UK firms for the period 2005–2015. This study also uses the global financial crisis as an arguably exogenous shock on overall risk in the economy to investigate its effect on managers' joint use of textual risk disclosures and earnings smoothing. Findings: This study finds that risk disclosure and earnings smoothing are negatively associated. This finding supports that managers with incentives to mask the firm's true underlying risk through smoothing earnings provide lower levels of risk-related disclosures. This study documents that the trade-off between risk disclosure and earnings smoothing is more pronounced during the global financial crisis period than before and after the crisis period. Further, this study demonstrates a more negative association for firms with higher volatility of cash flows. This negative association is robust to various model specifications, additional corporate governance related controls and an alternative measure of earnings smoothing. Originality/value: The findings provide new empirical evidence about the association between risk disclosure and earnings smoothing and support the opportunistic hypothesis, especially when firms are faced with increased risk. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine the impact of conversion to REIT status by former listed property companies in the United Kingdom on the level of institutional ownership during the period of 2007–2016. Design/methodology/approach: This paper uses an event study framework to track the change in institutional ownership three years before and after a REIT conversion event. This event study approach circumvents the sample selection bias issue associated with the conversion event wherein the decision to convert to REIT is likely to be endogenous. Findings: Panel regression analysis reveals that changing to REIT status led to a 12.8 and 15.2% increase in institutional ownership and number of institutional investors, respectively. The first order of priority in institutional investors' investment in REIT shares is their preference for liquidity. Further analysis shows that institutional investors changed their preferences towards characteristics associated with systematic risk, firm age and liquidity after the conversion event by becoming less averse to firm-specific risk, placing more emphasis on firm age and less emphasis on systematic risk and liquidity. Practical implications: Overall, conversion to REIT status helps increase former property companies' investor base, which is in line with the regulator's aim to open up the property market to a wide range of investors through the introduction of a REIT regime. Findings from this paper also have policy implications for countries that are considering a REIT regime for their capital market and existing REIT regimes without a formal conversion mechanism. Originality/value: This paper offers, for the first time, evidence on 1) how conversion to REITs influences firms' institutional ownership and 2) the determinants of converted REITs' institutional ownership. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate whether UK public targets manage their earnings using real activities manipulation in the period prior to the announcement of a mergers and acquisition (M&A). It also examines whether the payment method in M&As affects the degree to which takeover targets manipulate earnings. Design/methodology/approach: Using a sample of 131 UK listed targets acquired over the period 1995–2013, this paper examines real earnings management (REM) by employing OLS regression models. The data related to deals have been mainly collected from Thomson One Banker and Thomson Reuters Eikon databases. REM is examined by investigating abnormal cash flow from operations, abnormal discretionary expenses and abnormal production costs. This analysis was supplemented by conducting additional robustness checks. Findings: The results show that UK takeover targets manage earnings upwards through cutting discretionary expenses in the year prior to the acquisition, while they do not do so by manipulating sales or production costs. Moreover, targets of cash-only or mixed-payment deals do not have the same strong motivation to manage their earnings as stock-financed deal target counterparts do. Our results continue to hold after using alternative accrual earnings management (EM) measures, controlling for unobservable firm heterogeneity using the fixed-effect model and controlling for endogeneity using the two-stage Heckman (1979) model. Practical implications: The main findings of this study could be beneficial for various parties involved M&As, such as standard setters and regulators. A need arises to improve disclosure rules and enhance overall financial reporting quality in the capital markets with the aim of reducing information asymmetry and agency conflicts. Originality/value: As far as the literature on EM around M&As is concerned, only EM by acquirers has been examined, and not much attention has been paid to targets' EM. [ABSTRACT FROM AUTHOR]

Social Impact Bonds are considered a highly marketised form of public service delivery and are understood to "work" through the introduction of new capital into payment-by-results contracts. This paper, for the first time, connects findings from UK SIBs to the evaluation of conventional payment-by-results contracts and the theoretical literature on governance and accountabilities. Markets and capital emerge as a potential red herring with hybridity of governance and the "social" positioned as important dimensions facilitating qualitatively different services. This raises questions as to whether it is possible to extend SIBs, or whether increased scale and mainstream investors will dilute the "SIB effect". [ABSTRACT FROM AUTHOR]

The United Kingdom (UK) and China have launched the London–Shanghai Stock Connect Scheme to achieve an integrated capital market. In this article, the takeover market is used as an example to examine the extent to which regulatory alignment between the UK and China is possible. The focus is on the role of financial intermediaries in the two markets and how they may influence the governance model of the transfer of corporate control by an open offer to the shareholders of the target company (a takeover bid). This article argues that without regulatory alignment such an integrated market is unlikely to be realized. There are differences between the UK and China in the economic model, ownership structure, and institutional arrangements, which have been reflected in the differences in interests served by takeover law in the two regimes. The design of the framework for takeover law in the UK empowers financial market participants, so as to attract capital to the London markets. In contrast, China's takeover law is mainly aimed at facilitating industrial restructuring and creating globally competitive national companies (national champions). Hence, the UK's shareholder-centred takeover model, with a strong focus on financial intermediaries and international investors, would not be easily replicated in China. However, the UK model could provide lessons for China to develop its takeover market—that is, further its market structure reform, develop independent financial intermediaries, and also attract an increasing number of investors. [ABSTRACT FROM AUTHOR]

Key aspects covered refer to the cost of leaving the EU and in particular the implications for corporate bond risk premiums in the UK and the Eurozone: The gap between the interest rates of corporate bonds and government bonds could increase in the UK and Eurozone, respectively, as a result of BREXIT where the 2016 BREXIT referendum itself is considered to be a first BREXIT event (see the empirical findings), followed by the main BREXIT event, namely the day of officially leaving the EU – possibly as a No-deal BREXIT. It is as yet not clear what type of BREXIT will be implemented – hard versus soft – and it is also unclear what type of free trade agreement the EU and the UK could accomplish post-BREXIT. However, it is obviously necessary to carefully consider the background of the BREXIT dynamics and to then refer to various versions of BREXIT if one is to understand the inherent politico-economic dynamics of BREXIT – with a No-deal case representing an analytical benchmark which most politicians in the British Parliament obviously would want to avoid; a simple way to indeed avoid this case, with obvious high costs for the British economy, is not easy to discern as the UK's political system is fractured. If the safe-haven status of the UK should be impaired by BREXIT, the rise of government bond interest rates by 0.3 percent would stand for the same burden as the net UK contribution to the EU. [ABSTRACT FROM AUTHOR]

A number of firms in the United Kingdom list without issuing equity and then issue equity shortly thereafter. We argue that this two-stage offering strategy is less costly than an initial public offering (IPO) because trading reduces the valuation uncertainty of these firms before they issue equity. We find that initial returns are 10% to 30% lower for these firms than for comparable IPOs, and we provide evidence that the market in the firm's shares lowers financing costs. We also show that these firms time the market both when they list and when they issue equity. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of capital structure in the context of the Gulf Cooperation Council (GCC) and United Kingdom (UK) real estate sectors. The results of a bivariate analysis indicate that leverage in the UK is much higher than in GCC countries. This may be attributable to UK companies facing a lower cost of debt, which would facilitate their raising of debt capital from the market. In addition, UK real estate firms tend to be larger and have higher levels of tangibility and retained earnings compared with GCC firms, while GCC firms tend to be more profitable and have more growth opportunities. The results of panel and Tobit regression analyses support both trade-off and pecking order theories; for instance, company size was found to have a significant positive impact on different types of debt measurements (market and book debt ratios), which is consistent with the trade-off theory, while profitability and retained earnings to total assets exhibited a significant negative impact for GCC and UK real estate firms, which is consistent with the pecking order theory. Importantly, these results hold true regardless of whether the regressions are estimated using an OLS, random effects, fixed effects panel estimation or a Tobit model. [ABSTRACT FROM AUTHOR]

This paper examines the economic consequences of the initiation of governance analyst coverage. Governance analysts process, enhance, and disseminate governance‐related information to capital market participants via, for example, governance reports and ratings. Using an exogenous shock in the United Kingdom, I find that an increase in governance analyst coverage results in increased governance quality, improved liquidity, increased financial analyst following, and improved investor breadth. These findings are consistent with governance analysts creating value for firms via monitoring, information dissemination/production, and investor recognition. [ABSTRACT FROM AUTHOR]

This study investigates the sustainability disclosure effects of the introduction of the Companies Act 2006 Regulations 2013 in the United Kingdom. The regulation mandates the disclosure of information on greenhouse gas emissions, gender distribution and human rights issues. We examine two research questions: first, whether firms increased disclosure on the mandated topics after the regulation became effective relative to a control group, and second, whether a potential increase in disclosure is moderated by firms' reporting incentives, namely, firms' capital market visibility, growth orientation, governance structure, prior voluntary sustainability disclosure levels and critical media coverage. Our sample consists of the FTSE-350 firms and a matched control group of US firms. We use textual analysis to assess the disclosure of the mandated sustainability topics in firms' annual reports. Specifically, we examine two types of disclosure, namely, the disclosure of the mandated key performance indicators and the narrative disclosure. Our results reveal a significant increase for both types of disclosure relative to the control group. Overall, this treatment effect tends to be smaller for firms with higher reporting incentives, i. e., reporting incentives mitigate the regulatory effect. Taken together, our results suggest that both standards and reporting incentives shape firms' sustainability disclosure level. [ABSTRACT FROM AUTHOR]

This article offers a new interpretation of the Baring crisis, the most dramatic financial collapse of the nineteenth century, by focusing on how information brokerage allowed Barings to abandon its risk-averse practices in the mid 1880s. I argue that the mediators who bridged structural holes (gaps between social clusters) shaped actors' access to information as well as their expectations regarding its quality. Information brokers who enjoyed philos ties with at least one of the parties connected by the bridging relationships could promote collaborative arrangements more likely to survive an environment of heightened uncertainty. The performance of such brokers in the 1880s enabled cooperation between Baring Brothers & Co. and the Banque de Paris et des Pays Bas and supported the London house's growing association with the Anglo-Argentine firm of S. B. Hale & Co. in the second half of the 1880s. Cooperation gave Barings an illusion of security amid the costs of increasing competition and supported the house's growing engagement in South American affairs. Nevertheless, the strategy proved ineffective at barring the entry of new players. By the late 1880s, ties produced by brokerage connected Barings to the house's former competitors, producing a cohesive social cluster. Barings thereafter had access to redundant information, which hindered the house's ability to assess risk. [ABSTRACT FROM AUTHOR]

The article looks at the structure of interest rates in a small open economy in Great Britain. The hypothesis that agents hold financial assets and liabilities of different currency denominations in their portfolios is noted as the starting point for a large portion of international capital movements analysis. The author notes that the share of domestic financial assets held in the portfolio is dependent on the difference between the rate of interest on domestic assets and the rate of interest on assets abroad. By measuring the differential between the rate of interest on ten-year and three-month government liabilities in Great Britain, it is concluded that the international term structure has bearing on Great Britain's term structure.

In this study, we measure and compare the stock price response to annual and interim earnings disclosures released in United States and United Kingdom capital markets. Our sample consists of 110 firms from the United States, the United Kingdom, and 12 other countries that were listed in both the United States and the United Kingdom (cross-listed) during January 1988 to December 1990. We find that the stock price response to earnings disclosures is significantly greater in the United States than in the United Kingdom. We also examine the effect of market microstructure factors that vary across firms and between jurisdictions. Our results are consistent with the expectation that liquidity is positively correlated with the stock price response to earnings disclosures and that liquidity is greater in the United States than in the United Kingdom. [ABSTRACT FROM AUTHOR]

Most of the existing studies on the international capital market are based on a segmented market approach. This approach treats the different national capital markets as separated entities, hardly related to each other. For this reason (under the assumption of market segmentation), comparable capital assets may differ in their return on different national markets. Although market segmentation enjoys a surprisingly large following, it is not the only possible interpretation of the international capital market. The alternative hypothesis, i.e., that prices of capital assets in the international capital market behave as if there is one multinational perfect capital market, should be considered. The one market hypothesis has the advantage of being consistent with much of the accepted economic theory. Also the one market hypothesis is unambiguous where market segmentation can stand for any number of specific imperfect market formations. Market segmentation is widely accepted as the only possible structure of the international capital market. Different currency areas, separated political organizations and trade barriers have been given as a priori evidence for the segmentation of the international capital market. This, however, is not necessarily the case. An examination of the behavior of capital asset prices reveals that the price behavior is consistent with the one market hypothesis. It should be noted, however, that a certain body of data can be consistent with both the one market hypothesis and any one of several specific forms of market segmentation. But as the main theme of this study is to show the validity of the one market approach to the multinational equity market, it is sufficient to show that one cannot reject the one market hypothesis with regard to this market. [ABSTRACT FROM AUTHOR]

The article looks at three aspects of European capital markets. It considers the characteristics of integrated capital markets, the relationship of integration to efficiency, the extent to which developments have affected integrated capital markets, and the prospects for future development. The author notes that, while Europe contains capital markets of importance, no European capital market exists, leaving markets for long-term capital to be organized on unintegrated national lines. The efficiency of European capital markets are considered from an international point of view. Capital markets in Germany, Sweden, Great Britain, and other European countries are discussed.

Abstract: This article examines the liquidity of the London capital markets in the decades following the liberalization of UK incorporation law. Using comprehensive stock and bond data, we calculate a measure of market liquidity for the period 1825–70. We find that stock market liquidity trended upwards but bond market liquidity did not increase over the sample period. Stock market liquidity during our sample period was partially influenced by the bond market, rather than fluctuations in economic output. In our analysis of the cross‐sectional determinants of individual stock liquidity, we find that firm size and the number of issued shares were important determinants of liquidity.  Finally, we find little evidence of an illiquidity premium, which is consistent with the view that investors did not price liquidity in this nascent market. [ABSTRACT FROM AUTHOR]

Building on the institutional perspective on capital markets, we examine the process of legitimation that underpins investor valuation of initial public offerings in the context of institutional polycentricism. We focus on the impact of board interlocks of the CEO and internal and external board members on investor perceptions of initial public offering firms in the United States and United Kingdom. We find that the extent of board members’ interlocks relates positively to the extent of the CEO’s interlocks, but this relationship is stronger in the United Kingdom than in the United States. More extensive interlocks lead to higher valuations in the United Kingdom than in the United States. This is the result of differences in institutional confluences that underpin corporate governance in the two culturally related countries. [ABSTRACT FROM AUTHOR]

There is a common perception that the Japanese takeover market excludes foreign companies. However, this is not because Japanese takeover law has been designed to protect target companies. Comparing Japanese takeover law with the UK Takeover Code and the European Takeover Directive, considered as competitive models, this thematic and content-based investigation reveals that Japan does not have overt anti-takeover legislation. There is no stake-building control to alert a target company; there is no provision against virtual bids; post-bid undertaking is not legally binding on the bidder; the equivalent of the mandatory bid under the UK Takeover Code and the EU Directive is set at a much higher level so making it less costly for a bidder to obtain corporate control; there is no price control to protect minority shareholders. Yet the traditional symbiotic relationship between management and shareholders through cross-shareholdings and shareholder perks remains a major obstacle to a successful unsolicited takeover. Measures under Abe's economic reform of three arrows have been introduced to increase the success of unsolicited takeover bids by reducing cross-shareholdings through tax incentive measures and increasing board independence through a soft-law based governance code. These are unlikely to have a major impact on removing the existing obstacles. Adopting the UK Takeover Code or the EU Takeover Directive would not cure the problem and would more likely entrench the existing situation. [ABSTRACT FROM AUTHOR]

We examine the effects of quantitative easing (QE) on the volatility of and correlation between stocks, short-term bonds and long-term bonds in the UK. Using a multivariate dynamic conditional correlation generalised autoregressive conditional heteroscedasticity model, we find that volatility in each of the markets experiences a significant increase during the financial crisis that is reversed during the first phase of QE. We find limited effects of the specific occurrence or intensity of QE activity on either the volatility or correlations for these asset classes, but some evidence that volatility persistence experienced temporary shifts during the sample period. We find short-term variability in the correlations between the markets during the crisis and QE periods, but cannot reject the hypothesis that correlations were constant throughout the sample period. [ABSTRACT FROM AUTHOR]

By most standards, Britain in the 19th century was the world's leading financial nation, with more developed capital markets than any other country. An influential view in the law and finance literature argues that, holding macroeconomic factors constant, the different financial development can be attributed to more stringent disclosure regulation in Britain. Presenting a granular analysis of regulatory reform in Britain and Germany, this article shows that the level of disclosure regulation was largely comparable in both countries during the relevant period and that reform initiatives were not an exogenous stimulus of financial development, but evolved incrementally in response to changing market conditions. On the other hand, the legal regime governing the formation of stock corporations developed in diametrically opposed directions in the two countries as a result of concerted efforts by policy makers to change market conditions. The article argues that these rules, which were relevant to organisational choice and the availability of different sources of financing, stand out as the most striking difference between Germany and the UK. [ABSTRACT FROM AUTHOR]

Financial services constitute an important net export for the UK economy, for which the rest of the EU is the largest market. This paper considers the likely consequences of Brexit for this sector. A 'soft' Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk option for the City than other Brexit options, because it would enable financial services firms to continue to rely on regulatory passporting rights. Under a 'hard' Brexit scenario, where the UK leaves the single market, the UK might in principle be able to benefit from the EU's third country 'equivalence' frameworks for financial services, but these are cumbrous and incomplete alternatives to passporting. UK firms would find it considerably more costly to export to the EU. This would also be a loss to the EU27, because the UK specializes in capital markets services for which the EU, over-reliant on banking, recognizes a need. However, much of this 'UK' activity is provided by subsidiaries of US-headquartered groups. In the event of hard Brexit, these firms may be able to compete just as effectively from New York as from London. If soft Brexit proves politically impossible, it seems highly desirable that the UK push for a transition period of continued EU membership pending at the very least completion of equivalence determinations and, more usefully, the conclusion of a suitable bilateral agreement. [ABSTRACT FROM AUTHOR]

The historical decision of United Kingdom to exit from European Union (called BREXIT) expressed by a representative national referendum started to produce economic effects. The future of Europe is significantly changing now. The hard negotiations between United Kingdom and European Union could be a sign for other Eurosceptic countries. The future of European Union project is uncertain now. The BREXIT should be a clear sign for European Union for a strong and extended reform. United Kingdom is more important for EU than the opposite. This potential separation is a clear loss for the whole integration project. United Kingdom hardly pleaded for reforms for many years. United Kingdom is one of the most developed, freest and competitive nation of the world. United Kingdom is more liberal and market oriented than many countries of European Union. United Kingdom has one of the most developed capital market and the biggest FOREX market of the world. The BREXIT offers now limited options for both sides, including the option to do not exit from European Union. This paper analysis the causes that led to BREXIT and potential economic effects for both sides, including the case of Romania. [ABSTRACT FROM AUTHOR]

This study examines the effect of integrating sustainability into corporate strategy on various aspects of shareholder value creation and financial performance in the British capital market. The employed method is based on the content analysis of corporate disclosures and a new technique for assessing the adoption of the corporate sustainability concept (embracing the environmental, social, and financial aspects of a company's policies at the same time). Using extensive data of FTSE 350 firms covering the years 2006-2012, 65 companies were selected as meeting corporate sustainability criteria. For the above period, we find that these firms were characterized by higher financial risk exposure, lower asset growth rates, lower BV/MV ratios, lower EVA ratios, and higher MVA ratios. Such relations were generally present among different size and industry groupings. The results support the thesis that firms that incorporate sustainability issues into their business operations are better able to leverage their resources toward stronger financial performance and shareholder value creation than other companies. The paper contributes to the literature by offering a more holistic approach to corporate sustainable performance measurement and shedding additional light on its relation to financial performance in the context of the recent global financial crisis and its direct aftermath. [ABSTRACT FROM AUTHOR]

For over 14 years, the United Kingdom had a single rulebook for financial services that covered conduct of business and prudential matters. As an online,' free and accessible resource, it translated the tome of complicated EU/UK financial services legislation into a comparably more user-friendly (non-legalese) rules-based resource. This Financial Services Handbook ("UK FS Handbook ") survived the transition as a single rulebook used by an integrated national competent authority ("NCA ") to two distinct successor NCAs, one acting primarily as a conduct supervisory, the other primarily as a prudential supervisor for certain regulated persons. Each NCA inherited parts of the UK FS Handbook but still used a single rulebook with rules being shown in a "Combined View ". For the European Union and its plan to create a truly Single Rule book for EUfinancial services ("the EU Single Rulebook Project") the UK FS Handbook, its successes and the regrettable split that ended its tenure as a single rulebook, may serve as a lesson for how to make that project a reality, as well as how to ensure both Banking Union ("BU") and Capital Markets Union ("CMU") can take root successfully and how to complete the EU's Single Market. This article looks at these issues in turn, beginning with the evolution and changes to the UK FS Handbook, discussing what this entails for the EU's efforts and what other UK resources could assist the EU regulatory and supervisory stakeholders in delivering on their goals against an environment with ever-changing rules that seeks to deliver simplicity and clarity for market participants. [ABSTRACT FROM AUTHOR]

This article investigates labour's interests in corporate governance in the UK. Contemporary political economy conditions generate a confluence of factors that stimulates new demands and engagement strategies. Labour actors endeavour to forge corporate governance innovation through utilising cultural institutions in the regulation of firms in capitalist markets. [ABSTRACT FROM AUTHOR]

The article examines moral panic in line with Polish immigration in Great Britain. It presents patterns of British societal reaction driven by global labour and capital markets considering volatile markets. It also suggests that moral panic can be understood by the logic of social control and hegemonic struggle.

This article examines the increasing access by UK issuers of high yield bonds to US investors notwithstanding substantive differences in the approach to valuation of the issuer in financial distress in US and UK restructuring law and, therefore, in anticipated return on default. It examines the development of the market in the context of existing theories on the relationship between law and finance and suggests that previous accounts have overlooked the adaptive capacity of the finance market to legal environment and the implications of such structural adaptation for the prospects of convergence in law. Three states are identified: where the market is poorly adapted to the legal environment and reinforces other pressure for change, where the market is adapted to the legal environment and is a neutral influence on, or even dampens, other pressure for change and where both legacy and adapted structures exist, potentially pulling in different directions at the same time. [ABSTRACT FROM AUTHOR]

The bourgeoning investigation into the manipulation of key financial benchmarks, such as the London Interbank Offered Rate (Libor), has seen the imposition of an escalating range of fines by regulatory and law enforcement agencies. While primarily focused in the United Kingdom and the United States, the misconduct spans the globe. It has also prompted the exit of a number of financial institutions from the setting of benchmark rates. This has posed a range of practical and conceptual problems, which apply at national, regional and global level. At a practical level, the credibility of the benchmarks, which are a public good, has been undermined, prompting an incremental but observable erosion of public confidence in market integrity. Exit has the effect of reducing pricing transparency and thus liquidity. Secondly, the investigation of collusion has brought the arrival of competition regulators into the arcane world of financial regulation. Their focus on breaking up cartels changes the dynamics, prompting a rapid expansion of the regulatory perimeter. It also facilitates a fundamental rethinking of capital market purpose. This paper evaluates how the confluence of regulatory and criminal investigation offers a time-limited opportunity to transcend the incremental and flawed nature of technical reform. It assesses the conceptual coherence of attempts, driven by the United Kingdom, but with significant support from both the Financial Stability Board and the International Monetary Fund, to create "fair and effective" markets by articulating a new vision of "inclusive capitalism" and whether this addresses the observed institutional corruption. [ABSTRACT FROM AUTHOR]