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Part IV Market Institutions And International Capital Markets, 12 Intermediaries—From Handmaiden to New Market

Edited By: Jeffrey Golden

From: International Capital Markets: Law and Institutions (2nd Edition)

Cally Jordan
Edited By: Jeffrey Golden (Consultant Editor)

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 22 May 2024

Intermediated securities — Financial regulation

This chapter studies the roles of intermediaries. As exchanges developed in Western Europe and the colonies, they spun out a widening web of intermediaries participating in the process of trading financial products. In the lead up to the global financial crisis, the roles assumed by intermediaries, and their sources of revenue, had mutated over time. Intermediaries became issuers and capital raisers in their own right. Originally handmaidens to the exchanges, intermediaries created a new, free floating, trading world. In this new trading world, the potential conflicts of interest inherent in agency relationships have been exacerbated by the multiple roles intermediaries have assumed. Further intensifying the stresses on market relationships have been the rapid changes in trading practices now permitted by technology and the internationalization of the capital markets. Lastly, over ten years after the global financial crisis, regulatory responses continue to play out, as markets and intermediaries jockey and adjust to the new rules.

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