Asset Management and Investor Protection An International Analysis

by Franks, Julian; Mayer, Colin; Correia da Silva, Luis

• ISBN13: 9780199257096
• ISBN10: 0199257094
• Format: Hardcover
• Copyright: 2003-03-27
• Publisher: Oxford University Press

Summary

Asset management is a major industry playing an increasingly important role in economic activity around the world. Traditionally, it has been primarily associated with the 'stock market' economies of the UK and the USA, but as this book shows some of the most spectacular growth in activity of recent years has occurred in continental Europe. This has presented opportunities and challenges. New forms of financial instruments and institutions have emerged in countries that have traditionally relied on debt and non-market forms of intermediation. Competition has intensified and entry has occurred both within and across national markets. However, this growth has been accompanied by potential problems; will investors enjoy a wider range of products and services, they face more complex instruments and transactions. Therefore, the potential for failures, such as misdealing and fraud, may have increased. The natural response is to strengthen regulation, but there is a fine balance to be struck between in adequate and excessive regulation of asset managers. This is particularly complicated in the context of European capital markets. European countries have traditionally had very different financial systems and asset management businesses, therefore it is no surprise to discover that they have many different approaches to regulating asset managers. How should the European Commission respond to this diversity? Should it seek to create greater uniformity via common regulatory rules? The particular focus of this book is financial resource requirements. There is currently an active debate about the role which capital requirements should play in asset management, particularly in the European context. In order to address this issue, the authors argue that it is necessary to understand the nature of the asset management business in different countries and the risks that it faces. They therefore discuss how the asset management business operates; how it is organized; the nature and size of risks in the business, who bears them and ho they are financed; and what the alternative forms of investor protection are, together with their associated costs and benefits.

Table of Contents

List of Figures	vi
List of Tables	vii
List of Abbreviations	xi
Acknowledgements	xiii
Introduction	1	(6)
The Policy Implications	7	(18)
Summary of Research Findings	25	(8)
Assets under Management: Europe and the USA	33	(30)
The Industry Structure: Europe and the USA	63	(16)
The Regulatory Framework	79	(68)
The Regulation of Investment Management Services in the USA	147	(26)
The Basel Committee's Proposals on a Capital Charge for Operational Risk	173	(28)
Survey of European Asset Managers	201	(48)
A Case Study in Authorized Collective Schemes	249	(8)
Literature Review	257	(18)
Glossary	275	(4)
References	279	(6)
Index	285