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Stock Market Regulation in the Pacific Basin: Lessons from U.S. Experience

Pacific-Basin Capital Markets Research, Vol. 1, 1990

11 Pages Posted: 23 May 2006  

Michael S. Rozeff

SUNY at Buffalo - Department of Financial & Managerial Economics

Abstract

This paper surveys some of the prevalent theories of stock market regulation (market failure and public choice.) The validity of generalizing U.S. regulatory experience to the markets of other nations depends on which, if any, of these popular theories holds. No convincing evidence exists to support market failure. Hence, the scientific basis for generalizing U.S. experience to other markets is limited. The negative lesson is that imitation of U.S. regulation does not necessarily improve the general welfare. Observed regulation depends on interest groups. Not only is there no ideal model to follow, but no such ideal exists. The paper reviews important phenomena that any positive theory of regulation is confronted with. It provides detailed criticisms of the SEC and reviews Benston's strong critique of mandatory disclosure.

Keywords: stock market regulation, SEC, mandatory disclosure, market failure, public choice theory

JEL Classification: K22, G28, G38

Suggested Citation

Rozeff, Michael S., Stock Market Regulation in the Pacific Basin: Lessons from U.S. Experience. Pacific-Basin Capital Markets Research, Vol. 1, 1990. Available at SSRN: https://ssrn.com/abstract=903520

Michael Rozeff (Contact Author)

SUNY at Buffalo - Department of Financial & Managerial Economics ( email )

Buffalo, NY 14260
United States

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