Vanderbilt Journal of Transnational Law


Manuel F. Cohen

First Page



In the past ten or fifteen years, a revolution has been going on in the financial and securities field. This phenomenon is only an aspect of a wider revolution which is occurring throughout our society. To understand these revolutions, one must understand not only the economic issues but also the national interests and prejudices that affect governmental action. For example, securities law is moving in a slightly different direction in Canada from that in the United States. This introduction sets forth what I sense is going on in Western Europe.

Unless the people whose savings the market wishes to tap have confidence that the market is a safe place to assign a portion of all of their savings, there are really no good capital markets. Moreover, other political and economic factors profoundly affect the nature of the market. Governments often have a policy of directing savings of both individuals and groups of financial intermediaries such as institutional investors. For example, in some countries, pension funds and insurance companies are prohibited from investing a substantial percentage of their assets or reserves in equities, or they are required to provide a market for government securities. These restrictions on investment simply reflect a government attitude that its needs come first. Such a way of thinking is one of the main problems in reaching what the Europeans refer to as a "harmonization" among the various members of the Common Market; nor does it encourage channeling funds into the equity market.