Capital market, gray (grey capital market)

In general, the unregulated, unorganized interaction of supply and demand for financial products. The gray capital market, which is very difficult to define in detail, takes place (appears) largely in the advertising section of daily newspapers and on the Internet with corresponding pages and Internet forums fed specifically for this purpose. – The disadvantages of this market are in particular – the often very high risk and – the largely lacking market transparency with regard to the transactions and the traded securities as well as the – legal uncertainty; legal prosecution even in the case of fraud is often hardly possible. – It is true that the information situation for investors has been considerably improved by the obligation to publish a prospectus, which came into force on July 1, 2005. However, insofar as corresponding transactions are offered from offshore financial centers or from the domestic shadow banking sector, national supervisory authorities can hardly exert any influence. – See supervision, indirect, Beschores, cheap copy, blue-sky laws, daimonion, steam room, dingo values, domicile concealment, enforcement, frontrunning, secret tip, money laundering, ghetto banking, grudge effect, foundation fraud, high-risk countries, capital note, black, nominee, offshore financial centers, pump and dump, parallel banking, avenging angels, wire fraud, underground banking. – Cf. BaFin Annual Report 2003, p. 73 f., BaFin Annual Report 2004, pp. 83 ff. (called and defined “black” capital market there), BaFin Annual Report 2005, pp. 139 (prospectus requirement), p. 189 (far-reaching investigative and intervention powers of BaFin), BaFin Annual Report 2006, pp. 200 f. (prohibition notices; court proceedings), BaFin Annual Report 2007, pp. 210 ff. (BaFin measures; instead of “gray” capital market, the term “black” capital market is now used), BaFin Annual Report 2008, pp. 202 f. (legal developments), BaFin Annual Report 2009, p. 230 f. (unsatisfactory judicial decisions), BaFin Annual Report 2010, p. 246 f. (BaFin/Justice coordination unit established; ongoing supervisory activities), BaFin Annual Report 2012, p. 214 ff. (BaFin supervisory and investigative activities), and the respective BaFin Annual Report, chapter “Cross-Sectional Tasks,” Financial Stability Report 2012, p. 67 ff. (extensive analysis and risk assessment).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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