Information asymmetries and financial intermediation during the Baring crisis : 1880-1890
AbstractThis paper analyses the information structure of European investors on the eve of the Baring crisis in 1890. We argue that financial intermediaries were in a privileged position by having the monopoly of information. This situation led to conflicting interests because business and proper investors’ advice were not always compatible, as they are not even today. Even though spreads in secondary market prices between Argentina’s long-term sovereign bonds and U.K. consols remained stable throughout the 1880s, primary market variables such as underwriting fees or total amounts of “money left on the table” in Argentina’s Initial Public Offerings reflect the deteriorating macroeconomic situation of the country. In fact, this paper suggests that lessons from the Baring crisis can be transferred to contemporaneous crises.
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Investment Banking; Information Asymmetries; Financial Crises; Sudden-Stops; Economic History;
Other versions of this item:
- Juan-Huitzi Flores, 2007. "Information asymmetries and financial intermediation during the Baring crisis : 1880-1890," Working Papers in Economic History wp07-16, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
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- Sebastián Nieto-Parra, 2009.
"Who Saw Sovereign Debt Crises Coming?,"
Journal of LACEA Economia,
LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
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