|2.||European regulation should enforce transparency and priority rules so as to create the appropriate incentives for price discovery and liquidity supply.|
|•||Liquid stock markets reduce transactions costs and attract investors, which in turn reduces the cost of capital for corporations, and thus spurs investment.|
|•||Active stock markets, where efficient block trading facilities exist, make it easier for large shareholders to play their monitoring role, which enhances the performance of corporations.17|
|•||Transparent stock markets are less prone to the asymmetric information and agency costs deterring investments in foreign stocks and thus preventing investors from reaping the gains of international diversification.|
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