An Evaluation of the Role and Performance of UK capital markets as an alternative source to bank finance

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ACKNOWLEDGEMENT

I would first like to express my gratitude for my research supervisor, colleagues, peers and family whose immense and constant support has been a source of continuous guidance and inspiration.

DECLARATION

I [type your full first names & surname here], declare that the following dissertation/thesis and its entire content has been an individual, unaided effort and has not been submitted or published before. Furthermore, it reflects my opinion and take on the topic and is does not represent the opinion of the University.

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ABSTRACT

This study aim is to analyze the role and performance of UK capital market as an alternative source of bank finance. The focus of this dissertation is on the UK capital markets responses to management disclosures of financial firms. It was further broken down into four major components consisting of reliable financial information, appropriate measures of capital markets responses, rational actors, and an efficient market.

The first step of this dissertation will consider the relative utility of the financial information disclosures made available to the capital markets. This will require a review of the related accounting and management literature that addresses the usefulness of financial information. The authoritative literature as well as empirical research studies that address financial information utility will be examined. This will provide a foundation with respect to the reliability of financial information to discern the performance of a firm and further to be relied upon to differentiate between firms as to stronger or weaker in performance and related financial position. If the financial information can in fact, be relied upon, then financial analysis procedures should also be useful.

Statistics is well established that in UK, Capital markets are in a subordinate position and status of finance bank. They are performing well according to the criteria which are expected. It has been satisfying many people living in UK and internationally with their services.

In this vast literature, however, the role of financial markets and institutions has been either completely ignored or else treated casually with no adequate attempt to establish the conceptual and empirical link between finance and growth. While there has been resurgence in interest, in this link in recent years, most studies do not go beyond including financial variables as country fixed effects in a growth regression models.

In this study, we utilize corporate finance theory and statistical analysis for carry out the empirical analysis of the financial growth. We examine the link of financial growth by using the channel through which financial development influences the economic performance at financial firms and corporate bond level.

TABLE OF CONTENTS

CHAPTER # 1: INTRODUCTION9

Introduction9

Background of the study10

Statement of Problem11

Aims and Objective12

Research Question12

Research Framework12

Rationale13

Significance of the study14

Organization of Paper16

CHAPTER # 2: LITERATURE REVIEW17

Financial Information and Related Measures17

The choice of appropriate financial centres23

Obligations specific to certain financial centres24

Corporate Finance26

Compare the corporate bond with bank finance29

Mention favourable terms in the capital markets and in the bank finance31

UK history of few companies in capital markets and of ...