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Monday, April 30, 2007

Evidence Grows Proving Wall Street Deregulation is Bogus

I came across the latest piece of evidence that supports the regulatory status-quo on Wall Street while catching up on some weekend reading. The latest issue of Barron’s has a column from Arindam Nag which covers the impending IPO of ManFinancial, the brokerage unit of ManGroup, a powerhouse UK-based financial services firm. Interestingly, the firm’s management has chosen to list the offering on the New York Stock Exchange, as oppose to the London Stock Exchange. I guess contrary to Paulson’s Committee on Capital Markets Regulation’s arguments, the NYSE has some competitive juice left after all.

Perhaps ManFinancial’s management paid close attention to the recent study released by a group of academies, regarded as the leading authorities on foreign companies that list shares in the U.S. The study, which was covered by the Wall Street Journal, found that “investors are still willing to pay a sizable premium for foreign-company shares listed in the U.S., in return for meeting tough U.S. regulatory standards.” In other words, it’s our regulatory environment that makes our markets more competitive.

Here’s a thought: If Paulson successfully scales back regulation then will a new group form: Deregulation was Ultimately a Major Blunder, or D.U.M.B.?


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