The Insider Information and Security of the Stock Market: the European Experience

Анотація

One of the main principles of the financial market is its information transparency, that is a maximum awareness of market participants about the occurring processes. Insider deals perform the information function on the stock market and are essential elements of the investment decisions mechanism. They contain specifics of circumstances unknown to the broad range of investors, thus enabling them to take decisions which, adequate to the current market situation. The comparative analysis of Anglo-Saxon and continental (European) model of financial markets proved the existence of a high degree of insider trading, exactly in continental model. The high role of banks, as shareholders of industrial companies, and direct or indirect impact on them are determined. At the same time German economy as a classic representative of the insider model demonstrated the greatest resistance to the crisis. The analysis proves that insider information usage in the European market model does not justify the actions of insiders as speculators or for profit. The strong interest of banks, as shareholders, led to timely decisions on debt restructuring, risky investments return and a considerable stabilization of the financial system.

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