VI. Give Russian equivalents for the following words and phrases

used in the text:

emerging economies; foreign and domestic savings; productive assets; transitional economies; a research team; regulatory regimes;

the new law's important provisions; commercial code of 1934; preferred shares; cross-dealings between firms; one-share-one-vote;

full disclosure of corporate goings-on; a block of shareholders;

a derivative market; index futures; financial practices

VII. Translate the following sentences into Russian in writing:

The numbers make it plain there is indeed a link, but did effective regulation promote financial development, or was it the other way round?
Countries with regulatory codes descended from English common law tend to have stronger investor protection than countries with civil-law traditions founded on Roman law; presumably, on the other hand, the extent of modern financial development cannot have affected the historical legal tradition.

3. The investigations shed an interesting light on recent changes in Eastern Europe's regulatory regimes.

4. Hungarian investor protection measures are not quite as generous as Poland's: a block of shareholders must command 10% of a company's votes to demand an audit or meeting, and those votes can be attached to shares in ratios as high as ten to one.

5. Even in Eastern Europe's most promising regulatory systems, enforcement remains a problem.

VIII. Summarise the article, using the words and phrases given below:

to entrench the rights of minority shareholders; to require disclosure of corporate information; to promote financial development; to affect smth; to carry only one vote; to remain in force; to own small stakes;

to siphon off the wealth of minority shareholders; to band together;

to challenge a company's activity or accounts; to inch closer to the West European standard; to bridge the gap; to set the markets on the right course

IX. Translate the following sentences into English:

Сложившиеся в стране традиции в области законодательства определяют степень защиты инвестора в данной стране.

2. Одним из важнейших положений нового закона устанавливается принцип «одна акция - один голос».

3. На общем собрании акционеров любая группа держателей акций, которой принадлежит 5% компании, может потребовать независимой аудиторской проверки.

4. Последний председатель Комиссии по ценным бумагам и биржам США уверен в необходимости полной прозрачности деятельности компании, с тем, чтобы инвесторы могли сами оценить ее перспективы.

5. Исследования, проведенные учеными Гарвардского университета, подтверждают что права, которые инвесторы получили в результате принятия нового закона о компании, в значительной мере способствовали развитию рынка капитала в стране.

X. Supply details to prove the following:

Hungary and Poland, compared with others, bridged the gap with the West.

XI. Work in several groups. Comment on the following statements:

1. If you want a big, smoothly functioning market for capital, you have to protect investors from mischief.

2. Legal protection of investors does not yet always mean effective protection of investors.

Text 3.

The problem of Tax Harmonization

Pre-reading task

Read the following text, then explain its title.

Taxation is one of the hot topics at EU summits. The European Commission's efforts to stamp out "unfair" tax competition ran into opposition, notably from Britain. But it turns out that this might have been for the best. A recent research suggests that imposing common taxes on capital income would do all of the EU's member countries more harm than good.

The system of tax harmonisation is based on the economic theory. If an entrepreneur is trying to decide where to start a company, the tax rate he pays on capital income will be one of the factors he has to consider. It might influence his return on investment.

The EU tax rates vary across jurisdictions. Imposing equal rates would ensure that the entrepreneur's decision rests only upon factors that are central to his company's prospects.

It has suggested that capital benefits from "agglomeration": in other words, a cluster of capital in the same place is very useful. When companies bunch together, obtaining services, strengthening infrastructure and sharing knowledge all become easier.

Countries must be integrated enough to make agglomeration feasible. To understand how agglomeration might have affected tax competition in the EU, the member countries are divided into two groups: the core and the periphery. The core is made up of France, Germany, Italy and Benelux. The periphery consists of Greece, Ireland, Portugal and Spain.

Countries on the periphery would be forced to raise rates. Countries in the European Union's core, whose rates might already be depressed by tax competition with each other, would have to cut taxes (and public spending) even further.

Growth in information technology, falling transport costs and continuing economic integration will eventually do away with the benefits of agglomeration, not just in Europe, but worldwide. Come the moment when capital becomes fully mobile around the world, tax harmonisation may have its day.

Text-study

I. Learn the following words

To stamp out – подавлять, уничтожать;

capital income – доход от капитала;

tax rate – ставка налога;

to impose – облагать налогом;

dispersed – распространенный;

agglomeration – укрупнение, интеграция;

feasible – осуществимый, реальный.

II. Answer the following questions.

1. What is the system of tax harmonisation based on?

2. Why is it the tax rate on capital income that an entrepreneur has to consider first of all?