Broker Intermediaries

Abstract

A broker is an intermediary who sells information, but does not purchase financial assets from his clients or issue financial assets to them (see, e.g., Ramakrishnan and Thakor, 1984; Chant, 1987, 3, 11, 21–2; Lewis and Davis, 1987, Chapter 2; and Allen, 1990). There are many different kinds of brokers — search specialists who bring buyers and sellers together, insurance brokers, credit-rating agencies, forecasting units, financial consultants, investment analysts, accounting firms that provide specialist advice and auditing services, and others — but they all sell information without taking a direct stake in it by buying the assets on which they report; other intermediaries also provide information, but a broker does no more than provide information.