Gentlemen Bankers

Pak, Susie J.

doi:10.4159/harvard.9780674075573

Cited by 41 publications

(2 citation statements)

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“…In the case of costly legal recourse that existed in 1907, a group bonded by a common culture is suggested as the disciplinary mechanism for contract fulfillment even in the presence of detailed syndicate contracts. Pak () explores this common culture regarding how members of the Morgan network were bonded.…”

Section: Formation and Operation Of Underwriting Syndicatesmentioning

confidence: 99%

Post‐financial crisis changes in financial system structure: An examination of the J.P. Morgan & Co. Syndicates after the 1907 Panic

Rodgers

Payne

2020

Rev Financ Econ

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In the post‐2008 crisis period, policy makers debate the implications of banking system concentration. To shed light on this debate, we study a postcrisis period in which less banking regulation existed than in the present period, reasoning that an examination of a less regulated market might reveal useful insights about present day market agents' postcrisis actions. The years immediately following the Panic of 1907 merit study because the period shares important features with the post‐2008 crisis financial system: increasing interconnectedness, the growing complexity accompanying the rise of new industries, the rapid deployment of new communications technologies, and substantial innovation in financial instruments. Because the 1907 crisis preceded the Clayton Anti‐Trust Act of 1914, it also provides a window into studying market agents' behavior before legislation was enacted to discourage banking system concentration. We find evidence that the market share of corporate bond underwritings at J.P. Morgan & Co. increased in the post‐1907 crisis period. We suggest a mechanism by which market share increased: a more concentrated configuration of corporate bond underwriting syndicates. We also indicate that Morgan's increased share may have been a proxy for increased certification value of underwriter reputation because of systemic knowledge Morgan gained during the resolution of the Panic of 1907 rather than for increasing bargaining power. We do not find evidence that Morgan used market power to extract rents from issuers despite increased market share and more concentrated syndicate organization. While our results must be interpreted cautiously due to data limitations, possible lessons for present‐day policy makers are that consolidations in the financial system after a financial crisis are complex. Some consolidations may come about from information and reputational gains produced during the crisis. Others may be moves by some firms to concentrate market power and still others from efforts to improve efficiencies in intermediation.

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Section: Formation and Operation Of Underwriting Syndicatesmentioning

confidence: 99%

Post‐financial crisis changes in financial system structure: An examination of the J.P. Morgan & Co. Syndicates after the 1907 Panic

Rodgers

Payne

2020

Rev Financ Econ

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“…From detailed country studies, we know that in the first half of the twentieth century, corporate elites where typically organized around cities (Dooley, 1969;Levine, 1972;Allen, 1978). In the USA, the Boston banking elite was different from the one in New York (Pak, 2013;Mizruchi, 2013) Even in a small country as the Netherlands, the pre-World War II corporate elite was organized in the distinct elite communities of Amsterdam, Rotterdam, The Hague (with ties to the Dutch colonies) and the textile industry around Enschede (Heemskerk, 2007). There is ample evidence of how these local elites organized their cohesion through upper class social interactions.…”

Section: The Reorganization Of the Localmentioning

confidence: 99%

Where is the global corporate elite? A large-scale network study of local and nonlocal interlocking directorates

Heemskerk,

Takes,

Garcia-Bernardo

et al. 2016

Preprint

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Business elites reconfigure their locus of organization over time, from the city level, to the national level, and beyond. We ask what the current level of elite organization is and propose a novel theoretical and empirical approach to answer this question. Building on the universal distinction between local and nonlocal ties we use network analysis and community detection to dissect the global network of interlocking directorates among over five million firms. We find that elite orientation is indeed changing from the national to the transnational plane, but we register a considerable heterogeneity across different regions in the world. In some regions the business communities are organized along national borders, whereas in other areas the locus of organization is at the city level or international level. London dominates the global corporate elite network. Our findings underscore that the study of corporate elites requires an approach that is sensitive to levels of organization that go beyond the confines of nation states.

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Bibliography

2017

A Companion to the Gilded Age and Progressive Era

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Gentlemen Bankers

Cited by 41 publications

References 0 publications

Post‐financial crisis changes in financial system structure: An examination of the J.P. Morgan & Co. Syndicates after the 1907 Panic

Post‐financial crisis changes in financial system structure: An examination of the J.P. Morgan & Co. Syndicates after the 1907 Panic

Where is the global corporate elite? A large-scale network study of local and nonlocal interlocking directorates

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