Impact of After Covid Inflation on Investor Protection
Impact of After Covid Inflation on Investor Protection

Author(s): Diyana Miteva
Subject(s): Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, Business Economy / Management, Economic policy, EU-Accession / EU-DEvelopment
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: capital market; inflation; return; investor protection
Summary/Abstract: The after COVID inflation that started in the late 2021 seriously affected all EU economies. This paper aims at investigating how inflation impact the value of client assets invested on the capital market. It also concerns the issues of investor protection of such assets. Inflationary periods are stressful for the whole economy and especially for consumers. The longer inflation lasts the more significant impact it may have on investor behavior. In this paper it is argued that on a short term basis inflation could not be compensated at stock market prices but on a long term the capital market stock market returns overwhelms inflation. Investor protection regards the financial safety net which includes deposit guarantee and investor compensation schemes, which provide protection to investors at European level. Investor compensation schemes have not increased the level of protection for decades which due to the higher inflation rate causes a decreasing real protection. Deposit guarantee schemes on the contrary have imposed very high limit of protection in 2009 and 2010 which is 5 times higher than the minimum required limit on the EU level.

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