ESMA questions effects of mark to market, disclosure and CDS on short-termism

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By Jasper Cox
25 Jun 2019

The European Securities and Markets Authority is asking market participants if certain factors — such as fair value accounting, remuneration of investors and credit default swaps — exacerbate short-term pressures on companies, as part of its work on sustainable finance.

On Tuesday, the regulator published a questionnaire aimed at collecting evidence about on what aspects of the financial sector could cause short-term pressure on companies.

It provides a definition of ‘short-termism’ as: “The focus on short-time horizons by both corporate managers and financial markets, prioritising near-term shareholder interests over long-term ...

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