Strong public enforcement key to financial market development, study finds.
Enforcing securities laws is crucial for protecting investors. Recent research shows that strong public enforcement by securities regulators is just as important as disclosure rules in developing financial markets. Contrary to previous beliefs, public enforcement resources are closely linked to financial market depth. This means that public enforcement plays a significant role in shaping financial outcomes worldwide. Policymakers should not overlook the importance of public enforcement in promoting financial market development.