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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26981
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| Title: | Scaling the Hierarchy: How and Why Investment Banks Compete for
Syndicate Co-Management Appointments |
| Authors: | Ljungqvist, Alexander
Marston, Felicia C.
Wilhelm Jr., William J. |
| Keywords: | Underwriting syndicates
Commercial banks
Glass-Steagall Act
Global Settlement
Analyst behavior |
| Issue Date: | 29-Sep-2005 |
| Series/Report no.: | S-FI-05-02 |
| Abstract: | We investigate the empirical puzzle why banks pressured their analysts
to provide aggressive assessments of issuing firms during the 1990s when
doing so apparently had little positive effect on their chances of
receiving lead-management appointments and ultimately led to regulatory
penalties and costly structural reform. We show that aggressively
optimistic research can attract co-management appointments and that
co-management appointments eventually lead to more lucrative
lead-management opportunities. Our results suggest a potential
unintended anticompetitive effect of the Global Settlement if forcing
greater separation of research and investment banking diminishes
co-management opportunities for (and thereby potential competition from)
marginal competitors in securities underwriting, especially in the debt markets. |
| URI: | http://hdl.handle.net/2451/26981 |
| Appears in Collections: | Financial Institutions
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