The Death of Corporate Reputation: How Integrity Has Been Destroyed on Wall Street

9. The New, Post-Reputation Wall Street: Stock Exchanges

Organized stock exchanges, particularly the NYSE, used to play an important reputational role in U.S. capital markets. Stock exchanges no longer play such a role, but, unlike in the cases of accounting firms and credit rating agencies, regulations are not to blame for the demise of stock exchanges as reputational intermediaries. Instead, stock exchanges lost this status because of a secular change in the nature of their products and services. Today, stock exchanges are businesses that compete for the business of trading securities on behalf of customers. Traditionally, being listed in a major stock exchange was a seal of approval for a company. Besides this reputational signal, stock exchanges ...