Investment-Banking Relationships: 1933-2007

64 Pages Posted: 9 Jan 2014 Last revised: 15 Jul 2017

See all articles by Alan D. Morrison

Alan D. Morrison

University of Oxford - Said Business School; University of Oxford - Merton College

Aaron Thegeya

International Monetary Fund (IMF)

Carola Schenone

University of Virginia - McIntire School

William J. Wilhelm

University of Virginia - McIntire School of Commerce

Date Written: January 8, 2014

Abstract

We study the evolution of investment-banking relationships from 1933–2007. Relationship exclusivity and client concerns for the state of their banking relationships were strong through the first part of our sample period but then entered a period of sharp decline beginning around 1970. We interpret the bank-client relationship as an informal governance mechanism for curbing opportunistic behavior in a weak contracting environment and examine how technological change aggravated conflicts of interest within investment banks and between banks and their clients. This perspective sheds light on why trust between banks and their clients now appears to be in short supply.

Keywords: Investment Banking, Securities Issuance, Underwriting Syndicates

JEL Classification: G24, G30

Suggested Citation

Morrison, Alan and Thegeya, Aaron and Schenone, Carola and Wilhelm, William J., Investment-Banking Relationships: 1933-2007 (January 8, 2014). Saïd Business School WP 2014-1, Available at SSRN: https://ssrn.com/abstract=2376481 or http://dx.doi.org/10.2139/ssrn.2376481

Alan Morrison

University of Oxford - Said Business School ( email )

Department of Finance
Park End Street
Oxford OX1 1HP
United Kingdom
+44 18 6527 6343 (Phone)
+44 18 6527 6310 (Fax)

University of Oxford - Merton College

Merton Street
Oxford OX1 4JD
United Kingdom
+44 18 6527 6343 (Phone)

Aaron Thegeya

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Carola Schenone

University of Virginia - McIntire School ( email )

Rouss and Robertson Halls
125 Ruppel Drive
Charlottesville, VA 22903
United States
434-924-4184 (Phone)

William J. Wilhelm (Contact Author)

University of Virginia - McIntire School of Commerce ( email )

Rouss & Robertson Halls, East Lawn
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
434-924-7666 (Phone)
434-924-7074 (Fax)

HOME PAGE: http://gates.comm.virginia.edu/wjw9a/

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