The Public Interest

The transformation of Wall Street

Daniel Seligman

Fall 1970

Looking back at Wall Street in the 1960's, historians of finance will almost certainly conclude that the decade's most important event was the "institutional transformation"--no simpler term seems available---of the stock market. When the 1960's began, pension funds, mutual funds, insurance companies and other institutions together held about 15 per cent of American-owned common stock. When the decade ended, institutions' shareholdings were up to about 25 per cent of the total; Manuel F. Cohen, the former chairman of the Securities and Exchange Commission, estimated the value of their holdings early this year at over $260 billion. In 1960, institutions accounted for less than 25 per cent of New York Stock Exchange volume. The figure now is over 40 per cent; in addition, a significant and rising amount of institutional trading now takes place off the board.

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