UK Regime Research Articles

Fast Bargaining in Bankruptcy

I combine two previously separate strands of the bargaining literature to present a bargaining model with both one-sided private information and a majority vote for proposals to go into effect. I use this model to show that the US bankruptcy code produces shorter delays and higher welfare than the UK law. I consider the bargaining that occurs in bankruptcy between an informed firm and a set of uninformed creditors over a set of claims against the firm. The agents have an infinite horizon to bargain and cannot commit to a schedule of future offers. If individual creditors can be treated differently and a majority vote is required for the acceptance of new claims, adding creditors increases the probability of reaching agreement by the end of any given period. The US regime has these features. I give numerical examples which show the efficiency gains from increasing the number of creditors are significant. The UK voting rule allows one creditor a veto of all plans. Replacing the majority voting rule with the UK voting rule and allowing only the creditor with the veto to suggest plans, I show that the UK regime has longer delays and is less efficient than the US regime as long as the US regime has multiple creditors.

Enter the Grecian Horse? Regulation of Foreign Ownership of the Media in the UK

This article reviews national media ownership regulation in the UK. It places the UK's regime in an international context, showing it to be less onerous than some comparable countries and more onerous than others, and in a historical context, examining the changing configuration of UK media ownership and regulation. It assesses the economic and cultural effects of UK national media ownership regulation and identifies differences in and between some recent UK government policy documents on this subject (including the Draft Communications Bill of 2002). The article identifies national ownership regulation as applying only in the broadcasting sector and this sector is compared with others, notably film, newspapers and telecommunications. The dominant theme in UK government policy is identified as one of removal of national ownership regulation and, should government and parliament choose to frame the Communications Bill accordingly, an alternative method of promoting national cultural and economic goals in the broadcasting sector is identified.

Enterprise and Entrepreneurship: The Impact of Director Disqualification

This article examines the relationship between business organisation law and policies designed to encourage entrepreneurial activity. In particular the article focuses on the UK's regime for disciplining directors of failed companies, and notes that the United States does not have comparable rules. In the United States, director disqualification is designed to protect investors, as part of the protections necessary for the capital markets, whereas in the United Kingdom director disqualification is designed to protect creditors. The United States tends to rely on private, rather than public, mechanisms for the protection of creditors.

Problems and politics of regulatory fragmentation: The case of the Financial Reporting Review Panel and the Institute of Chartered Accountants in England and Wales

The UK regime for financial reporting and auditing was radically altered in 1990 and 1991 by two separate developments. When removing sole responsibility for setting accounting standards from the accounting profession, the opportunity was taken to establish a monitoring body, the Financial Reporting Review Panel (FRRP), to oversee compliance with company law and accounting standards, and with powers to apply to the courts for rectification. In addition, a new regulatory system for auditors was set up. This paper considers the problems arising between the regulatory responsibilities of the Institute of Chartered Accountants in England and Wales (ICAEW) and FRRP. In 50 cases (up to September 1999) FRRP found defects in accounts, 49 of which were audited by firms regulated by ICAEW, but no disciplinary action was taken by ICAEW until 1999. The way in which the new audit regulations were grafted onto the existing ICAEW disciplinary regime is considered, and the anomalies arising from that explored. The cases resulting in ICAEW's disciplinary action are compared with the other cases together with some evidence from finance directors and audit partners with experience of dealing both with FRRP and an ICAEW disciplinary investigation. The relevant theories relating to professional bodies and regulation are also reviewed. Finally, the authors review the problems identified in this study and make suggestions as to how they may be addressed.

Profitability and taxation in the UKCS oil and gas industry: analysing the distribution of rewards between company and country

Against the background of record levels of UK hydrocarbon production and a government review of the UKCS tax regime, this paper provides evidence that the government’s share of UKCS profits is very low by historical and international standards and demonstrates that the current tax regime is extremely weak. The justification for the latter is then challenged by assessing the relative profitability of UKCS companies, using data from UK national accounts and from Form 10-K and Form 20-F company reports and analysing both accounting profits and forecast discounted cash flow. This shows that companies operating on the UKCS enjoy substantially higher profitability relative to both other UK companies and other oil and gas provinces elsewhere in the world. Further evidence of the weakness of the UK regime is provided by a comparison with the Norwegian oil and gas tax regime. The paper therefore makes a strong case for the reform of the UKCS tax regime.

The effects of the Chinese fiscal system in shipping: a comparison with the UK regime

Assessing the effects of fiscal systems on investment in shipping by using the discounted cash flow technique has recieved much attention over a number of years. This paper examines the recent change in the business environment of Chinese shipping companies and argues for the relevance of using the same technique in the Chinese context. The technique which has been developed over the years is outlined and the current Chinese and UK fiscal systems applied to shipping are described. Based on the comparison and analysis of the effects of the two systems, some policy implications are made.