Financial Analysts and Their Contribution to Well-Functioning Capital Markets

In this paper, we discuss analysts, their roles in capital markets, regulation shocks that affected analysts in recent years, and what we can learn about these issues from academic research. We build upon well-discussed topics such as analysts' conflicts of interest, their tendency towards optimism, and shortcomings of their research. More importantly, we emphasize the importance of contextualizing the environment in which analysts operate, who they believe to be their main recipients of their research, and where opportunities for future research exist