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

Flandreau, Marc; Flores, Juan H.; Gaillard, Norbert; Nieto Parra, Sebastián

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

NBER Working Paper No. w15128

47 Pages Posted: 21 Jul 2009 Last revised: 4 Sep 2010

See all articles by Marc Flandreau

Marc Flandreau

Centre for Economic Policy Research (CEPR)

Sebastián Nieto Parra

Organization for Economic Co-Operation and Development (OECD)

There are 2 versions of this paper

Date Written: July 2009

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: Suggested Citation

Flandreau, Marc and Flores, Juan H. and Gaillard, Norbert and Nieto Parra, Sebastián, The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007 (July 2009). NBER Working Paper No. w15128, Available at SSRN: https://ssrn.com/abstract=1434642