Negative media coverage actually helped these banks gain business in the lucrative field of managing IPOs, according to research by Thomas Roulet at the University of Cambridge.
Writing for Barron’s, Roulet explains, “Although negative media coverage may turn general public opinion against big banks, the clients of investment banks leading IPOs are hardly members of the mass public. Instead, the business executives who hire investment banks to lead IPOs as book runners usually share the professional values of the bankers criticized in negative press coverage.
“My study looks at 3,503 IPOs between 2007 and 2011, analyzing press coverage of those banks in three top U.S. daily newspapers—the Wall Street Journal, New York Times and Washington Post—on 28 investment banks which together represent nearly 90% of invitations to be book runners.”
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