Information asymmetries and financial intermediation during the Baring crisis : 1880-1890 /

This paper analyses the information structure of European investors on the eve of the Baring crisis in 1890. We argue that financial intermediaries were in a privileged position by having the monopoly of information. This situation led to conflicting interests because business and proper investors’...

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Bibliographic Details
Main Author: Flores, Juan-Huitzi
Format: eBook
Language:English
Published: Madrid : Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones, 2007
Series:Working papers in economic history ; WP 07-16
Subjects:
Online Access:https://e-archivo.uc3m.es/handle/10016/1066?show=full
Description
Summary:This paper analyses the information structure of European investors on the eve of the Baring crisis in 1890. We argue that financial intermediaries were in a privileged position by having the monopoly of information. This situation led to conflicting interests because business and proper investors’ advice were not always compatible, as they are not even today. Even though spreads in secondary market prices between Argentina’s long-term sovereign bonds and U.K. consols remained stable throughout the 1880s, primary market variables such as underwriting fees or total amounts of “money left on the table” in Argentina’s Initial Public Offerings reflect the deteriorating macroeconomic situation of the country. In fact, this paper suggests that lessons from the Baring crisis can be transferred to contemporaneous crises.
Physical Description:1 recurso en línea (43 p.)
Bibliography:Incluye referencias bibliográficas.