earticle

영어

Investment banks (IBs) are often viewed as key players in the capital markets because of their pivotal roles in securities businesses as underwriters. Mainly, they are most useful as producers of information or creators of information market place, often resorting to resolve the asymmetric information problems that exist in the market. Indeed, IBs’ role as the providers of information to the market participants is vital for active financial markets especially for IPOs and renegotiation of corporate loan payments in times of distress. In such situations, investment banks can create added value by producing information for themselves or by designing and running a market place within which information are being produced and traded. As such, the Korean government has made a major regulatory reform so as to introduce investment banking businesses. Despite the favorable regulatory environment, Korea has witnessed thus far very little success with this endeavor as only few domestic IBs can be found in the domestic market. In general, financial companies in the Korean capital market play limited roles in stock brokerage. Other complex financial services related to securities underwriting or M&A deals are mostly performed by foreign investment banks. This paper, therefore, examines to gain better understanding what obstacles exist in Korea’s capital market for securities companies to properly function as full-fledged investment banks. In particular, the paper explains theoretically that it is difficult for an investment bank, which is affiliated with non-financial firms, to produce accurate information about its non-financial affiliates or their rivals, and thus it cannot build up easily its reputation as an IB. This potential conflict of interest often gets in the way for investment banks in Korea to secure their positions in the financial market as proper IBs, or reliable information sources. The game theoretic model used in this paper is based on Bolton et al. (2012), and Chemmanur and Fulghieri (1994). The model is developed in the context of an investment bank underwriting a stock issue and there are three main participants: issuers, investment banks, and investors. Issuers approach the equity market to raise capital for their projects and market their equity either directly to potential investors or through investment banks (or underwriters). Investment banks are producers of information about the issuers. But they produce noisy evaluations of issuers’ projects, which they report to investors when marketing equity in return for a fee from the issuer. Then, investors determine the market value of the equity based on the information provided by the IBs. In this paradigm, investors believe ex-ante that the project is good with the 50% probability. This lack of certainty creates room for the investment banks to perform their role using their expertise to accurately assess whether the project in hand is actually worth the investment. Investment banks obtain fees only from those firms whose equity they market. The fees charged by the investment banks are assumed to be a fraction k of the value added by their services for the issuer firms. This value added can be determined by assessing the difference between the value of equity when the investment bank is involved and the value when it is not when the issuer approaches the equity market directly without the help of an underwriter. After reviewing the report, the issuer has the choice whether to accept or refuse the investment bank’s proposed evaluation report. When the issuer firm turns down the investment bank’s report, it does not pay fees and the report is not disclosed. Once the investment bank’s evaluation report is announced or it is known that the report has been turned down, the issuer sets a uniform price for the investment. Investors, after taking into account the evaluation report and the price, finally decide whether and how much they intend to invest. Investors are divided into two types: sophisticated and naive. Sophisticated investors observe the payoffs of the game for both the investment bank and the issuer and they understand the potential conflict of interest between the investment bank and the issuer. Yet, they are not certain whether the project is good or bad, as they only have access to the investment bank’s report without being able to directly observe the IB’s signals about the project. On the other hand, naive investors simply assume that investment banks always truthfully evaluate the project. The main findings from this model are as follows. First, an IB which is affiliated with non-financial firms is more likely to produce distorted information than an independent IB is. Second, non-financial conglomerates are more likely to integrate with IBs if there are more naive investors in capital markets, if the fraction k is greater, and if the reputation costs are lower. Last, social welfare produced in the case when IBs are affiliated with non-financial conglomerates is always lower than that in the case when the IBs are independent. These results imply that separation of investment banking and commerce could be an important pre-condition for the successful introduction of IBs and their development.

한국어

흔히 자본시장의 꽃으로 불리우는 투자은행의 육성은 우리나라에서도 중요한 과제로 제기되어 왔으나 국내 금융투자회사들은 여전히 단순중개 등에만 주력하고 있으며 기업에 대한 정보 생산을 바탕으로 하는 증권의 인수나 M&A 중개 등의 업무 비중이 매우 낮은 형편이다. 이 논문은 이론 모형을 통해 우리나라에서와 같이 산업자본 계열사 들이 지배적인 위치를 차지하는 경우 투자은행이 제대로 성장하지 못하게 되는 문제를 분석하였다. 이에 따라 도출된 주요 연구결과는 다음과 같다. 첫째, 산업자본 소속 투자은행이 계열 비금융회사의 투자안을 평가하는 경우 독립계 투자은행에 비하여 항상 좋은 투자의견을 제시하는 정보 왜곡이 발생할 가능성이 높다. 둘째, 두 산업자본이 투자은행과의 결합 여부를 결정하는 게임에서 순진한 투자자가 많을수록 그리고 평판 비용이 작을수록 (결합, 결합)의 균형이 이루어질 가능성이 커진다. 마지막으로 산업 자본과 투자은행이 결합되어 있는 경우의 사회후생 수준은 분리되어 있는 경우에 비하여 항상 낮게 된다는 것을 발견하였다.