Commercial banks as underwriters: Implications for the going public process

Published

Journal Article

Commercial bank entry into securities underwriting can affect underwriter behavior because, unlike investment houses, banks also lend to firms. This raises several issues. Are banks better certifiers of firms' securities than investment houses? If banks hold equity in firms rather than debt, does this make certification more credible? Would one type of underwriter drive out the other? This paper provides a model for analyzing such issues, and derives several interesting results. First, banks, as lenders to firms, can actually be better certifiers than investment houses. Second, equity holding can hinder banks' certification ability. Finally, banks and investment houses can co-exist. © 1999 Elsevier Science B.V.

Duke Authors

Cited Authors

  • Puri, M

Published Date

  • October 1, 1999

Published In

Volume / Issue

  • 54 / 2

Start / End Page

  • 133 - 163

International Standard Serial Number (ISSN)

  • 0304-405X

Citation Source

  • Scopus