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

49 Pages Posted: 26 Aug 2009

See all articles by Marc Flandreau

Marc Flandreau

Centre for Economic Policy Research (CEPR)

Juan Huitzilihuitl Flores Zendejas

University of Geneva

Norbert Gaillard

NG Consulting

Sebastián Nieto Parra

Organization for Economic Co-Operation and Development (OECD)

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Date Written: June 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 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.

Keywords: banks competition, certification, primary bond market, sovereign debt crises

JEL Classification: F34, G14, G24, N2

Suggested Citation

Flandreau, Marc and Flores Zendejas, Juan Huitzilihuitl and Gaillard, Norbert and Nieto Parra, Sebastián, The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007 (June 2009). CEPR Discussion Paper No. DP7347, Available at SSRN: https://ssrn.com/abstract=1461976

Marc Flandreau (Contact Author)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Juan Huitzilihuitl Flores Zendejas

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

Norbert Gaillard

NG Consulting ( email )

France

HOME PAGE: http://www.norbertgaillard.com/

Sebastián Nieto Parra

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris, 75775
France

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