Financial Intermediaries and Agency Problems With and Without Vertical Incentives

The author is grateful for the comments received from Daniel Ackerberg, Eugenio Miravete, Richard Lowery, Robert Town, Gregor Matvos, Jorge Balat, Ari Kang, Sukjin Han, Sungwon Lee, Jaemin So, James Brand, Amit Seru, Philipp Schnabl, and Allan Collard-Wexler as well as referees and editors of this journal. Mark Egan has graciously shared his data on reverse convertible bonds and Mark Egan, Gregor Matvos, and Amit Seru have graciously shared their data on broker firms. The author thanks Cooper Killen, Caroline Norris, and Bryson Alexander for excellent research assistance. Views expressed are those of the author and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.