Text-study

1. Learn the following words

shareholder – акционер;

causation – причинная связь, причинно-следственные отношения;

collaborator – соавтор;

spawn of – плоды, результат;

to siphon – противозаконно перекачивать средства;

ponderous – тяжеловесный.

2. Complete the sentences with suitable words from the box

Minority shareholders; investor protection; an emerging economy; transitional economy; English common law; Roman law; regulatory regimes

1. Over the past five years, the two have studied the link between investor protection - notably, measures to entrench the rights of ….

2. To establish the direction of causation, the researchers needed to find something that affects the extent of … but that is not affected by big, deep capital markets.

3. These investigations shed an interesting light on recent changes in Eastern Europe's….

4. Most of the … had French- and German-inspired legal systems before communism.

5. The most ambitious reformers began to adopt American-style regulations derived from … .

6. Countries with regulatory codes tend to have stronger … than countries with civil-law traditions founded on … .

3. Answer the questions

1. What lesson did transitional economies learn better than others?

2. What does "investor protection" mean?

3. What is the factor that affects the extent of investor protection?

4. Why did the researchers settle on legal tradition?

5. What is likely to be a cause of financial growth, according to the research?

6. What does the research say about the changes in Eastern Europe's regulatory regimes?

7. What will be the role of Poland's new company law?

8. What are the prospects of Eastern Europe's regulatory systems improvement?

4. Fill in the blanks with the suitable prepositions

Poland's new law also permits small investors to band together to challenge a company's activity or accounts. At a general shareholder meeting, any group with 5% … the company can demand an independent audit. In the past, neither the meetings nor the ability to force action in this way were guaranteed. Those rights, along with one-share-one-vote, greatly helped the development … capital markets in the studies Mr. Shleifer and his collaborators produced.

The head … the Warsaw Stock Exchange (WSE) is a big fan of what he calls "the American sunlight principle". Like Arthur Levitt, the last chairman of America's Securities and Exchange Commission, he believes in full disclosure … corporate goings-on so that investors may judge companies' prospects … themselves in the bright light … day. He hopes Poland's new company law will help to bring the WSE'S market capitalization f… 17% … Polish GDP to the West European average of 60%.

5. Insert the articles where necessary

Hungary, … Czech Republic, Slovakia and Slovenia are also inching closer to … West European standard. Budapest's exchange is … furthest along, and at 21% of Hungarian GDP its market capitalization is bigger than the WSE'S. Its investor protection measures are not quite as generous as Poland's: … block of shareholders must command 10% of … company's votes to demand … audit or meeting, and those votes can be attached to shares in ratios as high as ten to one. It is clear, however, that Hungary and Poland, compared with others, have bridged … gap with the West.