Investment Banking: Institutions, Politics, and Law provides an
economic rationale for the dominant role of investment banks in the
capital markets, and uses it to explain both the historical evolution
of the investment banking industry and also recent changes to its
organization. Although investment decisions rely upon price-relevant
information, it is impossible to establish property rights over it and
hence is very hard to coordinate its exchange. The authors argue that
investment banks help to resolve this problem by managing "information
marketplaces," within which extra-legal institutions support the
production and dissemination of information that is important to
investors. Reputations and relationships are more important in
fulfilling this role than financial capital. The authors substantiate
their theory with reference to the industry's evolution during the
last three centuries. They show how investment banking networks were
formed, and identify the informal contracts that they supported. This
historical development points to tensions between the relational
contracting of investment banks and the regulatory impulses of the
State, thus providing some explanation for the periodic large-scale
State intervention in the operation of capital markets. Their theory
also provides a technological explanation for the massive
restructuring of the capital markets in recent decades, which the
authors argue can be used to think about the likely future direction
of the investment banking industry.
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Institutions, Politics, and Law
Produktdetaljer
ISBN
9780191647840
Publisert
2020
Utgiver
Vendor
OUP Oxford
Språk
Product language
Engelsk
Format
Product format
Digital bok