The Experts below are selected from a list of 2127 Experts worldwide ranked by ideXlab platform
Raghuram G Rajan - One of the best experts on this subject based on the ideXlab platform.
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is the glass steagall act justified a study of the u s experience with universal banking before 1933
The American Economic Review, 1994Co-Authors: Randall S Kroszner, Raghuram G RajanAbstract:The Glass-Steagall Act of 1933 removed commercial banks from the securities Underwriting Business. The authors evaluate the argument for the separation of commercial and investment banking that conflicts of interest induce commercial banks to fool the public into investing in securities which turn out to be of low quality. A comparison of the performance of securities underwritten by commercial and investment banks prior to the act shows no evidence of this. Instead, the public appears to have rationally accounted for the possibility of conflicts of interest and this appears to have constrained the banks to underwrite high-quality securities. Copyright 1994 by American Economic Association.
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is the glass steagall act justified a study of the u s experience with universal banking before 1933
The American Economic Review, 1994Co-Authors: Randall S Kroszner, Raghuram G RajanAbstract:The Glass-Steagall Act of 1933 removed commercial banks from the securities Underwriting Business. The authors evaluate the argument for the separation of commercial and investment banking that conflicts of interest induce commercial banks to fool the public into investing in securities which turn out to be of low quality. A comparison of the performance of securities underwritten by commercial and investment banks prior to the act shows no evidence of this. Instead, the public appears to have rationally accounted for the possibility of conflicts of interest and this appears to have constrained the banks to underwrite high-quality securities. Copyright 1994 by American Economic Association.
Randall S Kroszner - One of the best experts on this subject based on the ideXlab platform.
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is the glass steagall act justified a study of the u s experience with universal banking before 1933
The American Economic Review, 1994Co-Authors: Randall S Kroszner, Raghuram G RajanAbstract:The Glass-Steagall Act of 1933 removed commercial banks from the securities Underwriting Business. The authors evaluate the argument for the separation of commercial and investment banking that conflicts of interest induce commercial banks to fool the public into investing in securities which turn out to be of low quality. A comparison of the performance of securities underwritten by commercial and investment banks prior to the act shows no evidence of this. Instead, the public appears to have rationally accounted for the possibility of conflicts of interest and this appears to have constrained the banks to underwrite high-quality securities. Copyright 1994 by American Economic Association.
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is the glass steagall act justified a study of the u s experience with universal banking before 1933
The American Economic Review, 1994Co-Authors: Randall S Kroszner, Raghuram G RajanAbstract:The Glass-Steagall Act of 1933 removed commercial banks from the securities Underwriting Business. The authors evaluate the argument for the separation of commercial and investment banking that conflicts of interest induce commercial banks to fool the public into investing in securities which turn out to be of low quality. A comparison of the performance of securities underwritten by commercial and investment banks prior to the act shows no evidence of this. Instead, the public appears to have rationally accounted for the possibility of conflicts of interest and this appears to have constrained the banks to underwrite high-quality securities. Copyright 1994 by American Economic Association.
Donald R. Fraser - One of the best experts on this subject based on the ideXlab platform.
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Security Underwritings: United Kingdom Evidence
2016Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:The recent repeal of the Glass-Steagall Act in the United States has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass-Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of the United Kingdom following its removal of restrictions on commercial bank ownership of investment banks more than a decade before the United States. We find that ex ante yields of commercial bank underwritten corporate bonds generally do not differ from that of investment bank underwritten issues. The longer time period available from the U.K. experience also provides a unique opportunity for additional ex post tests not previously available in U.S. tests of the conflict of interest hypothesis. These ex post tests suggest no significant longer-term differences in ex post performance of the two samples. We thus find no evidence that would support the conflict of interest argument.
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Conflict of Interest in Commercial Bank Security Underwritings: United Kingdom Evidence
2003Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:The recent repeal of the Glass-Steagall Act in the United States has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass-Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of the United Kingdom following its removal of restrictions on commercial bank ownership of investment banks more than a decade before the United States. We find that ex ante yields of commercial bank underwritten corporate bonds generally do not differ from that of investment bank underwritten issues. The longer time period available from the U.K. experience also provides a unique opportunity for additional ex post tests not previously available in U.S. tests of the conflict of interest hypothesis. These ex post tests suggest no significant longer-term differences in ex post performance of the two samples. We thus find no evidence that would support the conflict of interest argument.
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Conflict of Interest in Commercial Bank Security Underwritings: Canadian Evidence
Journal of Banking & Finance, 2002Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:Abstract The recent repeal of the Glass–Steagall Act in the US has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass–Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of Canada following its removal of restrictions on chartered bank ownership of investment dealers. Both ex ante bond yield comparisons between commercial and investment bank underwritten issues and equity price reactions to bond issue announcements provide no evidence of a conflict of interest.
Manju Puri - One of the best experts on this subject based on the ideXlab platform.
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tying knots lending to win equity Underwriting Business
2004Co-Authors: Steven Drucker, Manju PuriAbstract:This article examines the practice of “tying,” which occurs when an underwriter lends to an issuer around the time of a public securities offering. We examine whether there are efficiencies from tying lending and Underwriting which lead to benefits for issuers and underwriters. We find evidence consistent with tying occurring for issues when there are informational economies of scope from combining lending and Underwriting. Firms benefit from tying through lower financing costs, as tied issuers receive lower underwriter fees on seasoned equity offerings and discounted loan yield spreads. These financing costs are significantly reduced for non-investment grade issuers, where informational economies of scope from combining lending with Underwriting are likely to be large. These results are robust to matching methodology developed by Heckman, Ichimura, and Todd (1997, 1998). For underwriters, tying helps build relationships that augment an underwriter’s expected revenues by increasing the probability of receiving both current and future Business. Both commercial banks and investment banks tie lending and Underwriting and offer price discounts, albeit in different ways, with commercial banks discounting loan yield spreads and investment banks offering reduced underwriter spreads.
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Tying knots: lending to win equity Underwriting Business
SSRN Electronic Journal, 2003Co-Authors: Steven Drucker, Manju PuriAbstract:This article examines the practice of "tying," which occurs when an underwriter lends to an issuer around the time of public securities offering in order to secure Underwriting Business. We examine the following questions: (i) How far do investment banks compete directly in tying? (ii) How does tying affect issuers, and in particular, their financing costs? (iii) Why do underwriters tie lending to Underwriting? We find that investment banks engage in a substantial amount of tying, contrary to concerns that they are disadvantaged by tying practices. We find that tying allows firms to reduce their financing costs, as tied issuers receive lower underwriter fees on seasoned equity offerings and discounted loan yield spreads. These results are robust to matching methodology developed by Heckman, Ichimura, and Todd (1997, 1998). Lower financing costs are consistent with informational economies of scope from combining lending with Underwriting. From the underwriters' perspective, we find that tying helps build relationships that augment an underwriter's expected investment banking revenues by increasing the probability of receiving both current and future equity Underwriting Business.
Gregory M. Hebb - One of the best experts on this subject based on the ideXlab platform.
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Security Underwritings: United Kingdom Evidence
2016Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:The recent repeal of the Glass-Steagall Act in the United States has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass-Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of the United Kingdom following its removal of restrictions on commercial bank ownership of investment banks more than a decade before the United States. We find that ex ante yields of commercial bank underwritten corporate bonds generally do not differ from that of investment bank underwritten issues. The longer time period available from the U.K. experience also provides a unique opportunity for additional ex post tests not previously available in U.S. tests of the conflict of interest hypothesis. These ex post tests suggest no significant longer-term differences in ex post performance of the two samples. We thus find no evidence that would support the conflict of interest argument.
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Conflict of Interest in Commercial Bank Security Underwritings: United Kingdom Evidence
2003Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:The recent repeal of the Glass-Steagall Act in the United States has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass-Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of the United Kingdom following its removal of restrictions on commercial bank ownership of investment banks more than a decade before the United States. We find that ex ante yields of commercial bank underwritten corporate bonds generally do not differ from that of investment bank underwritten issues. The longer time period available from the U.K. experience also provides a unique opportunity for additional ex post tests not previously available in U.S. tests of the conflict of interest hypothesis. These ex post tests suggest no significant longer-term differences in ex post performance of the two samples. We thus find no evidence that would support the conflict of interest argument.
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Conflict of Interest in Commercial Bank Security Underwritings: Canadian Evidence
Journal of Banking & Finance, 2002Co-Authors: Gregory M. Hebb, Donald R. FraserAbstract:Abstract The recent repeal of the Glass–Steagall Act in the US has cleared the way for commercial banks to enter the securities Underwriting Business. Many of the concerns that resulted in the original passage of the Glass–Steagall Act, however, still exist. One of these is the possible conflict of interest a universal bank faces. This paper provides evidence on this issue from the experience of Canada following its removal of restrictions on chartered bank ownership of investment dealers. Both ex ante bond yield comparisons between commercial and investment bank underwritten issues and equity price reactions to bond issue announcements provide no evidence of a conflict of interest.
