The long-term default performance of bank underwritten security issues

Journal Article (Journal Article)

The Glass-Steagall Act of 1933 barred commercial banks and their affiliates from underwriting and dealing in securities activities, amidst concerns that banks abused the trust of their depositors and clientele by systematically underwriting poor quality security issues. This paper examines if these concerns were justified by studying the long-term default performance of bank underwritten issues as compared to non-bank underwritten issues. The evidence shows that, contrary to conventional wisdom, bank underwritten issues defaulted less than non-bank underwritten issues, over a seven year period from the issue date and had a significantly lower mortality rate. © 1994.

Full Text

Duke Authors

Cited Authors

  • Puri, M

Published Date

  • January 1, 1994

Published In

Volume / Issue

  • 18 / 2

Start / End Page

  • 397 - 418

International Standard Serial Number (ISSN)

  • 0378-4266

Digital Object Identifier (DOI)

  • 10.1016/0378-4266(94)00040-9

Citation Source

  • Scopus