the three year old market for growth stocks had just announced new rules which aim to improve the flow of company information to investors. It is hoped that these new rules will restore investors’ confidence in a market damaged by profit warnings, insider dealing investigations and insolvencies. The article argues that the rules are long overdue. "They still do not afford investors the transparency found in the UK, with its more established equity culture", (Financial Times, 2001). Stewart’s suggestion of ‘an umbrella grouping, under an appropriate directive, at EU level which will collate information and provide expertise on legislative detail in different countries" (Stewart, 1995), seems a desperately needed measure to bring the differences across the EU a little closer together.While Europe struggles with coordination difficulties, the question of whether statutory government regulation is beneficial to financial markets is constantly debated.The frequently stated case for government regulation is based on the fact that failures in the market do occur and the interests of the public, therefore must be protected. Protection of Public interest is fundamental due to inherent difficulties within the financial services industry such as informational asymmetries which result in market failures.Due attention needs to be paid to banks when evaluating regulation of financial markets as they form such an important part of the financial services sector."Bank failures around the world in recent years have been common, large and expensive" (Goodhart et al., 1998). Banks provide three primary services. The ‘efficient payments system and the management of asset portfolios’ ((Fama), Quinn, 1992) and also ‘risk sharing and the monitoring and screening of borrowers’ ((Balkensperger & Dermine) Quinn, 1992). The primary source of market failure comes from the monitoring and risk sharing.A bank has two types ...
