An underwriting investment bank has a significant danger of devolvement. When an investment bank is contractually required to acquire unsubscribed shares of an issue, it will almost always have to do so at a price higher than the market-value price. Typically, the investment bank will not hang onto a failing issue for long, instead of selling the shares on the secondary market.
When a bank is unable to sell all of the securities offered and devolvement happens, it frequently suffers a financial loss. As a result, investment banks may try to reduce or remove their exposure by inserting terms in their contracts with issuing firms that eliminate or limit the risk of devolvement.