Regional stock exchanges should only be the first step

Philip Booth argues in favour of the idea outlined in today's Green Paper from BIS

Arguing in support of the regional stock exchange idea outlined in today’s Green Paper from the Department for Business, Innovation and Skills, Philip Booth, Editorial and Programme Director of the Institute of Economic Affairs, said:

"The Green Paper issued today by the Department for Business, Innovation and Skills floats the idea of regional stock exchanges, suggesting that some commentators have called for them to be set up. This is an odd statement because, in fact, it was the Liberal Democrat manifesto, to which Secretary of State Vince Cable signed up, which called for regional exchanges.”

“A complete liberalisation of the provision of business finance is very much needed. Wherever they have been allowed to operate, stock exchanges free of state regulation have thrived. This was particularly so in the UK, of course, in the period before 1986. Investment markets have, however, become increasingly bound up with regulation. Regulation particularly affects small companies who have a lower capacity to deal with it.”

“If the proposal for regional exchanges is implemented, they should be completely free of all statutory regulation - they should develop their own regulatory framework without any interference from government. But, regional stock exchanges will not be enough. National exchanges should also be allowed to develop - at first only raising capital for small firms if that is all the politicians will permit - that are entirely free of interference from the UK government and the EU."

To arrange an interview with Prof. Philip Booth, IEA Editorial and Programme Director or Mark Littlewood, IEA Director General, please contact Ruth Porter, Communications Manager, 077 5171 7781, 020 7799 8900, rporter@iea.org.uk.

 

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