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

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  • Marc Flandreau
  • Juan H. Flores
  • Norbert Gaillard
  • Sebastián Nieto-Parra

Abstract

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 setup experienced a radical transformation in the recent period, and we 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.

Suggested Citation

  • Marc Flandreau & Juan H. Flores & Norbert Gaillard & Sebastián Nieto-Parra, 2009. "The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007," NBER Working Papers 15128, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15128
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    More about this item

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • N00 - Economic History - - General - - - General

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