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The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007

We provide a comparison of salient organizational features of primary markets for foreign government debt over the very long run. We focus on output, quality control, information provision, competition, pricing, charging and signaling. We find that the market set up experienced a radical transformation in the recent period and interpret this as resulting from the rise of liability insurance provided by rating agencies. Underwriters have given up their former role as gatekeepers of liquidity and certification agencies to become aggressive competitors in a new speculative grade market.

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Paper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 04-2009.

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Length: 46 pages
Date of creation: Jun 2009
Handle: RePEc:gii:giihei:heidwp04-2009
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