US Banking Cartel?

Anybody read this article? Beautiful scatter-plot illustrating that average IPO fees for U.S. banks cluster around 7% while the european bank's fees have far more variability and are significantly lower.

In their analysis, the researchers concluded that even higher amounts of competition in europe relative to the U.S. couldn't explain away a majority of the difference in gross spread.

U.S issuers could have saved $1bn on average per year had they paid european fees.

So what are the reasons for this? For those of you who've spent time on both sides of the atlantic, any good explanations come to mind? Or are U.S. banks running a cartel as the article insinuates?

 

Interesting but generally known fact. Have only been working in European context and competition over here is certainly a lot more intensive vs. US where large corporates generally stick to a small set of BB firms as core advisors (at least that's what I hear whenever speaking to my US collegues about IPO fees). This analysis is for rather small IPOs with deal size between $25-100m. Has anyone seen a similar analysis for larger IPOs as well?

 
laudrup10:
So much for Wall Street being made up of folks who value competition and free markets. Lmao, what a joke.
All that shit is well and good until it fucks with profit.
If I had asked people what they wanted, they would have said faster horses - Henry Ford
 
laudrup10:
So much for Wall Street being made up of folks who value competition and free markets. Lmao, what a joke.

Businesses hate free markets because free markets benefit consumers.

********************************* “The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher.” - Oscar Wilde
 

Therefor OP's question has been answered. It IS a cartel, only they don't fix shady meetings like the ADM execs and the Japanese in the shady meetings to fix lysine prices in the 90s. (The Informant)

Still I Rise
 
Edmundo Braverman:
mikebrady:
So I went to 5 different places to look for milk and they were all within +- 20 cents. Another cartel? Same thing with practically everything else I buy. Not much variation.

The difference is those prices are dynamic and are a function of supply/demand, and not quiet collusion.

Isn't milk subject to an array of price controls/supports and subsidies? Doesn' the federal gov't enforce various regional milk cartels?

Haven't the free market solutions (crop insurance, futures markets, revenue insurance) atrophied as farmers seek redress from the gov't teet?

********************************* “The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher.” - Oscar Wilde
 

Cool service, this part kind of sucks though...

Once I’ve been paid, where does the money go? All payments are made to your PayDivvy Balance. You can say see your PayDivvy Balance next to your profile image on the top right of the page. Clicking it will take you to your ‘Transaction History’ where you can withdrawal a portion or all of your balance to your bank account.

 
orangebluedevil:
Cool service, this part kind of sucks though...

Once I’ve been paid, where does the money go? All payments are made to your PayDivvy Balance. You can say see your PayDivvy Balance next to your profile image on the top right of the page. Clicking it will take you to your ‘Transaction History’ where you can withdrawal a portion or all of your balance to your bank account.

Wrong thread?
If I had asked people what they wanted, they would have said faster horses - Henry Ford
 

it's pretty normal in an oligopoly to get the same price across all firms, they chose to compete on factors other than price and may occasionally engage in a price war.

this does not necessarily imply collusion.

so much for the text book stuff :p

 
mikebrady:
Dude..I pay the same price for porn across the board...that's collusion..friggin porn stars are out to rip us off.

Dude...this is 2011 who pays for porn?

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.
 
rickyross:
mikebrady:
Dude..I pay the same price for porn across the board...that's collusion..friggin porn stars are out to rip us off.

Dude...this is 2011 who pays for porn?

I believe he is saying he pays $0 across the board...

Making money is art and working is art and good business is the best art - Andy Warhol
 
mikebrady:
Dude..I pay the same price for porn across the board...that's collusion..friggin porn stars are out to rip us off.
So when people start uploading videos they secretly took of ex-girlfriends structuring IPOs in their dorm room and upload them onto sights like WSO and dealbreaker for free were all out of work?
Making money is art and working is art and good business is the best art - Andy Warhol
 

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