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The technology in the news box in this chapter gives

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Unformatted text preview: ee Chapter 2). Nevertheless, the direct financial markets are evolving even faster; due to technological advances, the costs of direct access to financial markets by savers are ever falling and the relative benefits to the individual savers of investing through FIs are narrowing. The Technology in the News box in this chapter gives an example of this ability to reduce transaction costs with an etrade on the Internet rather than using a traditional stockbroker and paying brokerage fees. In addition, a number of companies allow investors to buy their stock directly without using a broker. Among well-known companies that have instituted such stock purchase plans are Bell Atlantic, Bell/South, IBM, and Walt Disney. A final example is the private placement market, where securities are directly sold by corporations to investors without underwriters and with a minimum of public disclosure about the issuing firm. Privately placed bonds and equity have traditionally been the most illiquid of securities, with only the very largest FIs or institutional investors being able or willing to hold them in the absence of a secondary market. In April 1990, the Securities and Exchange Commission amended Regulation 144A....
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