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Kay Review

A few months ago, I had a post about the interim report of the Kay Review of UK equity markets.  The final report was published last week - click here for the full report.  Kay's report suggest that short-termism is an underlying problem in UK equity markets.  The recommendations of the Kay Report are radical and it will take a brave politician to implement them as the Kay Review is regarded as anachronistic by many (click here and here for examples).  As someone with a keen interest in financial history, the Kay Report certainly seems to pine for the halcyon days of equity markets before Big Bang.  

Modern equity markets certainly seem to have major problems.  Why have these arisen?  My hunch is that short-termism is symptomatic of a deeper problem - the rise of the institutional investor and the democratization of stock markets.  I think that an examination of this issue would make a fascinating PhD topic if anyone is interested!      

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