Asymmetry in forex market intervention: Does it reflect fear of reserve inadequacy?

Abstract This article compares consumer protection in the framework of discounts with the constituent elements of such sales and the relevant methods of protecting consumer rights, according to French, Emirati, Jordanian, and Tunisian legislation and judicial practice. The findings shed light on the operation of consumer rights and market protection, and argues that each legal system has developed divergent means to attain the same goal. While some legal systems have organised sales with detailed rules, others have engaged in very limited market intervention; in the latter case, consumers are prevented from enjoying an important set of rights, as consumer rights and market protection are determined by the merchants.

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Market reaction to the Karachi stock exchange floor imposition

South Asian Journal of Global Business Research ◽

10.1108/sajgbr-06-2014-0039 ◽

2015 ◽

Vol 4 (2) ◽

pp. 275-291 ◽

Cited By ~ 1

Author(s):

Saqib Sharif

Keyword(s):

Financial Markets ◽

Market Reaction ◽

Stock Exchange ◽

Price Volatility ◽

Price Limits ◽

Content Type ◽

Market Intervention ◽

Price Floor ◽

Price Freeze ◽

Regulatory Intervention

Purpose – The purpose of this paper is to investigate the market reaction to the decision made by the management of the Karachi Stock Exchange (KSE) to impose a price floor that resulted in trading curbs in 2008. The paper analyzes if regulatory intervention helped in restoring investor confidence. Design/methodology/approach – The paper examines the effect of enforcement of a price floor and trading curbs by splitting the time period studied into two periods: pre-floor and post-floor period. The parametric t-statistics and non-parametric Mann-Whitney test are used to compare the abnormal returns (ARs), abnormal trading volume, bid-ask spread, Amihud illiquidity ratio, and price volatility between the two periods. Event study was conducted to observe the behavior of market returns surrounding market-wide price floor. Finally, multivariate regression analysis was also applied by controlling for factors that might influence valuation, liquidity, and volatility. The standard errors have been corrected for cross-sectional clustering due to market-wide restrictions. Findings – The study found an adverse impact of price freeze and trading curb in the KSE, following the relaxation of floor (resumption of active trading). First, the price of securities (or ARs) significantly declined following the relaxation of the price freeze. Second, the market liquidity deteriorated following the relaxation of the price floor. Third, the price volatility increased in the post-floor period. It seems that the decision made by the KSE’s board to implement lower cap on prices for an extended period was ineffective. Practical implications – Market intervention by regulators to bring calm in the financial markets have negative consequences across the globe. The results presented in this paper suggest that implementing price floor brought inefficiency in the market and prevented firms from raising capital to finance their future investments. The author believe this study will add to the knowledge base of regulatory intervention and its impact on the performance of financial markets. Originality/value – There is no empirical evidence on the impact of price limits on volatility in emerging markets. The author selected Pakistan as a case study, where we particularly focus upon impact of the enforcement of a price floor around the peak of Global Financial Crisis (or market intervention) in Pakistan. This study also documents the effect of trading curb on liquidity and volatility in an emerging market, given that a majority of research on trading halt/price limits is based on developed markets.

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Privatization and Commercialization of the Internet Infrastructure: Rethinking Market Intervention into Government and Government Intervention into the Market

SSRN Electronic Journal ◽

10.2139/ssrn.255423 ◽

2003 ◽

Cited By ~ 1

Author(s):

Brett M. Frischmann

Keyword(s):

Government Intervention ◽

The Internet ◽

Internet Infrastructure ◽

Market Intervention

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Rien ne Va Plus? Distinguishing domestic regulation from market access in GATT and GATS

World Trade Review ◽

10.1017/s1474745605002351 ◽

2005 ◽

Vol 4 (2) ◽

pp. 131-170 ◽

Cited By ~ 17

Author(s):

JOOST PAUWELYN

Keyword(s):

Market Access ◽

The United States ◽

Online Gambling ◽

Important Distinction ◽

Basic Point ◽

Safety Requirements ◽

Market Intervention ◽

Domestic Regulation ◽

Legal Consequences ◽

Import Quotas

Depending on how one classifies market intervention, trade liberalization disciplines can be lenient or strict. Perhaps the most important distinction in this respect is that between government intervention labeled as a ‘market access restriction’ and that defined as ‘domestic regulation’. Both the GATT and the GATS declare market access restrictions (such as import quotas or limitations on the number of service suppliers) to be, in principle, prohibited. In contrast, domestic regulations (such as internal taxes, health standards, and safety requirements) are treated with much more deference. They are, in essence, only prohibited when discriminatory or more trade restrictive than necessary. Notwithstanding these major legal consequences, the distinction between market access and domestic regulation remains unclear. Based on a recent WTO dispute condemning the United States for banning online gambling, this article is an attempt to clarify the distinction. Starting from broad similarities, it finds crucial differences in this respect between GATT and GATS. For both, however, the paper's basic point is that a domestic regulation should not be regarded as a market access restriction simply because it has the effect of banning certain imports. To do otherwise risks seriously undermining the regulatory autonomy of WTO Members beyond anything imagined by the drafters of the WTO treaty.

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