Competition in the Underwriting Markets of Sovereign Debt: The Baring Crisis Revisited

Flores discusses the bargaining power of Argentina\u27s federal government relative to that of the underwriting banks. It examines how the financial intermediaries\u27 gatekeeping function eroded when faced with increased competition. Under normal circumstances, underwriters should have impeded Argentinean access to capital markets or at least hardened the terms under which Argentina could borrow

Information asymmetries and conflict of interest during the Baring crisis, 1880-1890

This article examines the potential conflict of interest of underwriters in London's foreign sovereign debt markets prior to the Baring crisis of 1890. We describe the main sources of information for investors concerning Argentina, whose government debt default contributed to Baring's collapse, and compare them with those of the underwriters, particularly Baring's. We then present some empirical evidence using data on bond prices and underwriting fees that demonstrate that Baring did not exploit its information lead to the detriment of investors. Finally, we present historical evidence that shows that Baring foresaw default before markets did and consequently planned a bailout loan that could not be issued due to political instability in Buenos Aire

Bonds and Brands: Foundations of Sovereign Debt Markets, 1820-1830

How does sovereign debt emerge? In the early nineteenth century, intermediaries' market power and prestige served to overcome information asymmetries. Relying on insights from finance theory, we argue that capitalists turned to intermediaries' reputations to guide their investment strategies. Intermediaries could in turn commit or else they would lose market share. This sustained the development of sovereign debt. This new perspective is backed by archival evidence and empirical data, and it suggests why strong but undemocratic states could borrow. "A good name is worth more than a gem.” Yiddish prover

The Peaceful Conspiracy: Bond Markets and International Relations During the Pax Britannica

This article provides foundations to Polanyi's famed argument that monopoly power in the global capital market served as an instrument of peace during the Pax Britannica (1815-1914). Our perspective is novel—we focus on the role of intermediaries and certification. We show that when information and enforcement are imperfect, there is scope for the endogenous emergence of "prestigious” intermediaries who enjoy a monopoly position and as a result, control government actions. They can implement conditional lending: they subject the distribution of credit to the adoption of peaceful policies. Prestigious intermediaries act that way because of their concern with maintaining an unblemished track record when wars increased risks of default. Our analysis, which brings together insights from different disciplines, provides a significant extension to, and departure from, recent research on how countries accumulate reputational capita

Cannibalism, post-settlement growth rate and size refuge in a recruitment-limited population of the shore crab Carcinus maenas.

Previous studies on intra-specific interactions among green shore crabs have been undertaken in very large populations, in which individuals concentrate at high densities in physically complex substrates. Under such conditions, cannibalism and interference competition often override initial density patterns delivered by larval supply. In this study, we focused on a Carcinus maenas population receiving a low supply of settlers. We reported crab abundance in habitats of different physical structure, and measured cannibalistic interactions, in different substrates, at a prey density expected only after a major recruitment event. Different predator and prey sizes were used to verify if juveniles froma critical range attain a size refugewhen coexistingwith subadults, which are still commonly found in the nursery habitat. Virtually no juvenile shore crabs were found on sandy habitats, and differences between sparsely and densely vegetated cover were only detected shortly after a settlement pulse, indicating that nursery habitats are under their carrying capacity most of the time. Even under extreme high densities, cannibalism on juveniles of 10 mm carapace width (CW) remained undetected, and predation on crabs half this sizewas only significant in lowand mediumZostera cover,when larger predators (20–25 mmCW)were included in experimental plots. The allometricmodel predicted the non-linear decrease of predation rate as a function of relative prey size, with a nearly asymptotic value of one prey consumed each 5 d by one predator in a square metre, when relative prey size attains 0.6. Such a relationship is expected for ‘cruising’ predators which rely on encounter rate. Growth estimates obtained using time series of the catch of distinct juvenile stages in artificial collectors indicated that crabs surviving 50 d after settlement have attained a size refuge from predation by larger conspecific

Financiamiento al comercio exterior y la década perdida de América Latina

The "Great Recession" has renewed the interest of economists on the link between trade finance, foreign trade and economic growth. Researchers have found that the effects of the drop in export credit explains the sharp drop observed in the international trade after the crisis of 2008. In this framework, this article proposes to examine the "lost decade" of Latin America during the debt crisis as a historical comparative example. In the years that followed the Mexican default of 1982 and that of other Latin American countries, access to international credit in the region was severely limited, especially that destined to finance imports. However, the implementation of the debt renegotiation strategy allowed to keep some lines of credit open to trade with Latin America, which in many cases served to finance the importation of intermediate goods and capital needed for local production. The official export agencies and the adherence to the IMF adjustment programs were determining factors in accessing this type of external financing.La “Gran Recesión” ha renovado el interés de los economistas sobre el vínculo entre financiamiento al comercio, comercio exterior y crecimiento económico.Los investigadores han encontrado que los efectosde la caída en el crédito a las exportaciones explica engran medida la fuerte caída observada en el comercio internacional luego de la crisis de 2008. En este marco,el presente artículo propone examinar la “década perdida” de América latina durante la crisis de la deuda como un ejemplo comparativo histórico. En los años que siguieron al default mexicano de 1982 y el de otros países latinoamericanos, el acceso al crédito internacional de la región se vio fuertemente limitado,en especial el destinado a financiar las importaciones. No obstante, la puesta en marcha de la estrategia de renegociación de la deuda permitió mantener abiertas algunas líneas de crédito al comercio con América latina, que en muchos casos servían para financiar la importación de bienes intermedios y de capital necesariosa la producción local. Las agencias oficiales de exportación y la adhesión a los programas de ajuste del FMI fueron factores determinantes para acceder a este tipo financiamiento externo.

The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007

We provide a comparison of salient organizational features of primary markets for foreign government debt over the very long run. We focus on output, quality control, information provision, competition, pricing, charging, and signaling. We find that the market setup experienced a radical transformation in the recent period, and we interpret this as resulting from the rise of liability insurance provided by rating agencies. Underwriters have given up their former role as gatekeepers of liquidity and certification agencies to become aggressive competitors in a new Speculative Grade market.

The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007

We provide a comparison of salient organizational features of primary markets for foreign government debt over the very long run. We focus on output, quality control, information provision, competition, pricing, charging and signaling. We find that the market set up experienced a radical transformation in the recent period and interpret this as resulting from the rise of liability insurance provided by rating agencies. Underwriters have given up their former role as gatekeepers of liquidity and certification agencies to become aggressive competitors in a new speculative grade market.certification, primary bond market, sovereign debt crises, banks competition

Efecto de los gradientes de pastoreo ovino sobre la vegetación y el suelo en Península Valdés, Patagonia Argentina

La introducción de ganado doméstico provocó modificaciones en la vegetación y en el suelo de la Patagonia extra-andina. Estos cambios alteraron procesos ecosistémicos, aumentaron la desertificación y causaron pérdida de biodiversidad. Es frecuente encontrar gradientes decrecientes de actividad animal partiendo de las aguadas (piósferas), que resultan adecuados para determinar el impacto del pastoreo sobre los ecosistemas. El objetivo de este estudio fue evaluar el efecto de la intensidad de pastoreo ovino a partir de gradientes de piósfera sobre la estructura de la vegetación y el suelo en estepas arbustivas representativas de Península Valdés, Argentina. Mediante modelos lineales generalizados mixtos (GLMM) y técnicas multivariadas se estudiaron las variaciones en la cobertura vegetal, complejidad vertical de la vegetación, número y área de parches vegetados, microtopografía del suelo y su compactación en relación con el gradiente de pastoreo. La intensidad del pastoreo disminuyó con la distancia a la aguada y explicó más de 50% de la variabilidad ambiental. Esto demuestra la existencia de efecto piósfera. La cobertura de herbáceas, mantillo, complejidad vertical de la vegetación y la microtopografía aumentaron al disminuir la presión de pastoreo en los sitios más alejados de la aguada, mientras que el porcentaje de suelo desnudo, gravas, cobertura de anuales y la compactación del suelo presentaron un patrón opuesto. Este estudio evidencia, por primera vez, la existencia de piósferas ovinas en Península Valdés e indica que la intensidad de pastoreo en la región se asocia con alteraciones ambientales compatibles con procesos importantes de degradación ecosistémica. Dada la importancia que reviste la península en el contexto de la conservación biológica de la región, se requieren más estudios de este tipo para una implementación efectiva de medidas de manejo que integren la ganadería y la conservación de los recursos naturales.The introduction of domestic livestock in the arid Patagonia produced changes in vegetation and soil that altered fundamental ecosystem processes, increasing desertification and biodiversity loss. In this region, it is common to observe gradients of decreasing animal activity from watering points where livestock impact is greatest near the watering sites, called piospheres, particularly suitable for assessing the effect of grazing on arid ecosystems. The aim of this study was to evaluate the effect of sheep-grazing intensity using piospheres on the structure of the vegetation and soil in shrubby steppes of Peninsula Valdes, Argentina. Variation of plant cover, vertical complexity of the vegetation, number and area of vegetated patches, micro-topography and soil compaction in relation to piosphere gradients were studied using Generalized Linear Mixed Models (GLMM) and multivariate analyses. Grazing intensity decreased according to increasing distance to the watering point. This fact, explaining more than 50% of the overall environmental variability, confirmed the existence of a piosphere gradient on each studied site. Such environmental changes were characterized by a gradual increase in grass and litter cover, vertical complexity of vegetation and soil microtopography at increasing distances from the watering point. Percentages of bare soil and gravel, cover of annual grasses and soil compaction showed the opposite pattern. This study demonstrates, for the first time, the existence of sheep piospheres in the shrubby steppes of Peninsula Valdes. Our results indicate that sheep-grazing intensity is associated with changes in the structure and composition of the vegetation and the soil characteristics that are compatible with degradation processes in the study region. Taking into account the importance of Peninsula Valdes in the context of biodiversity conservation, more studies of this type are required to implement effective management actions integrating livestock and conservation efforts on the terrestrial ecosystems of the regionFil: Cheli, Germán H. CCT-CONICE-CENPAT. Instituto Patagónico para el Estudio de los Ecosistemas Continentales; Argentina. Universidad Nacional de la Patagonia San Juan Bosco. Facultad de Ciencias Naturales; ArgentinaFil: Pazos, Gustavo E. CCT-CONICE-CENPAT. Instituto Patagónico para el Estudio de los Ecosistemas Continentales; Argentina. Universidad Nacional de la Patagonia San Juan Bosco. Facultad de Ciencias Naturales; ArgentinaFil: Flores, Gustavo E. Consejo Nacional de Investigaciones Científicas y Técnicas. Instituto Argentino de Investigaciones de las Zonas Áridas. Laboratorio de Entomología; ArgentinaFil: Corley, Juan Carlos. Instituto Nacional de Tecnología Agropecuaria (INTA). Estación Experimental Agropecuaria Bariloche. Grupo de Ecología de Poblaciones de Insectos; Argentin