Revenues generated from the sales of consolidated data represent a substantial source of income for U.S. stock exchanges. Until 2007, consolidated data revenue allocated in proportion to the number of reported trades. This allocation rule encouraged market participants to break up large trades and execute them in multiple pieces. Exchanges devised revenue-sharing and rebate programs that rewarded order-flow providers, and encouraged algorithmic traders to execute strategies involving large numbers of small trades. We provide evidence that data revenue allocation influenced the trading process, by examining trading activity surrounding various events that changed the marginal data revenue per trade.

We construct a novel dataset that matches bank holding company credit default swap (CDS) positions to detailed U.S. credit registry data containing both loan and corporate bond holdings by large U.S. banks. The dataset sheds new light on how banks use CDS, and what effects, if any, CDS use has on corporate credit risk. We show that few banks insure loans, even loans of distressed borrowers, suggesting that empty creditor problems among banks are not widespread. We find that banks are more likely to sell than buy CDS when they have a lending relationship with CDS firms. We then create new aggregate measures of hedging activity based on position-level data to test the empty creditor hypothesis. Contrary to existing studies, aggregate measures of credit risk hedging that do not condition on lending relationships overstate bank hedging activity. Furthermore, our regression results do not find any evidence that firm credit risk is adversely impacted when banks in particular purchase CDS.

We examine the decision of a firm to go public abroad and list securities outside their country of origin. Foreign IPO issuers are more likely to choose a global underwriter but only if the home country is less financially integrated. We find that the probability of conducting a foreign IPO is higher if the home country has a less developed stock market, its disclosure regime is weaker and is less financially integrated. Using a matched sample, we show that foreign IPOs raise more capital than their domestic counterparts. Finally, the determinants of the choice of a US listing are unique. Our results suggest that the rise of global underwriters facilitates the movement of capital across nations and contributes to world financial globalization.