Financial Times FT.com

Psychology behind high fees for underwriting

By Lina Saigol, Megan Murphy and Kate Burgess

Published: September 8 2009 18:48 | Last updated: September 8 2009 18:48

When Robert Benmosche, chief executive of AIG, said he wanted to halve the fees paid to Wall Street banks to take the insurer’s units public, he raised an issue that has long vexed companies looking to raise capital.

For years, fierce competition among banks has helped bring down fees in almost all products, except for underwriting initial public offerings.

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