Bonds and Brands : intermediaries and reputation in sovereign debt markets 1820-1830Report as inadecuate




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Editor: Universidad Carlos III de Madrid. Departamento de Historia Económica e InstitucionesUniversidad Carlos III de Madrid. Instituto Figuerola de Historia Económica

Issued date: 2007-07

Serie-No.: Working papers in Economic HistoryWP 07-12

Keywords: Financial history , Information asymmetries , Financial intermediation , Financial crises , Sovereign debt

JEL Classification: F37 , G15 , G24 , N20 , N23 , D24

Rights: Atribución-NoComercial-SinDerivadas 3.0 España

Abstract:How does sovereign debt emerge and become sustainable? This paper providesa new answer to this unsolved puzzle. Focusing on the early 19th century, weargue that intermediaries’ market power served to overcome informationasymmetries and sustained the deveHow does sovereign debt emerge and become sustainable? This paper providesa new answer to this unsolved puzzle. Focusing on the early 19th century, weargue that intermediaries’ market power served to overcome informationasymmetries and sustained the development of sovereign debt. Relying oninsights from corporate finance, we argue that capitalists turned tointermediaries’ reputations to guide their investment strategies. The outcomewas a two-tier global bond market, which was sustained by hierarchicalrelations among intermediaries. This novel theoretical perspective is backed bynew archival evidence and empirical data that have never been gathered so far.+-





Author: Flandreau, Marc; Flores, Juan-Huitzi

Source: http://e-archivo.uc3m.es


Teaser



Universidad Carlos III de Madrid Repositorio institucional e-Archivo http:--e-archivo.uc3m.es Instituto Figuerola de Historia y Ciencias Sociales IFCS - Working Papers in Economic History.WH 2007-07 Bonds and Brands : intermediaries and reputation in sovereign debt markets 1820-1830 Flandreau, Marc http:--hdl.handle.net-10016-944 Descargado de e-Archivo, repositorio institucional de la Universidad Carlos III de Madrid UNIVERSIDAD CARLOS III DE MADRID Working Papers in Economic History July 2007 WP 07-12 Bonds and Brands: Intermediaries and Reputation in Sovereign Debt Markets 1820 1830 Marc Flandreau and Juan H.
Flores Abstract How does sovereign debt emerge and become sustainable? This paper provides a new answer to this unsolved puzzle.
Focusing on the early 19th century, we argue that intermediaries’ market power served to overcome information asymmetries and sustained the development of sovereign debt.
Relying on insights from corporate finance, we argue that capitalists turned to intermediaries’ reputations to guide their investment strategies.
The outcome was a two-tier global bond market, which was sustained by hierarchical relations among intermediaries.
This novel theoretical perspective is backed by new archival evidence and empirical data that have never been gathered so far. Keywords: financial history, information asymmetries, financial intermediation, financial crises, sovereign debt. JEL Classification: F37, G15, G24, N20, N23 D24 Marc Flandreau : Sciences Po - Chaire Finances internationales -, 27 rue Saint-Guillaume, 75007 Paris, France. Email: marc.flandreau@sciences-po.fr http:--financesinternationales.sciences -po.fr-fr-bio-bio_flandreau.htm Juan H.
Flores: Departamento de Historia Económica e Instituciones, Universidad Carlos III de Madrid, C-Madrid 126, 28903 Getafe, Spain. Email: Jhuitzil@clio.uc3m.es http:--www.uc3m.es-uc3m-dpto-HISEC-English-facul ty-Personal_Juan_Flores.html UNIVERSIDAD CARLOS III DE MADRID c- Madrid 126...





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