Role of the Investment Bankers in the Financial System

ROLE OF THE INVESTMENT BANKERS IN THE FINANCIAL SYSTEM (TYBFM) Page 1

EXECUTIVE SUMMARY:-

Investment Banking encompasses not merely merchant banking but

other related capital market activities. Investment bankers identify capital

opportunities, negotiate and structure deals, and execute private and

public financial transactions.

Investment banks differ from commercial banks, which take deposits and

make commercial and retail loans. In recent years, however, the lines

between the two types of structure have blurred, especially as

commercial banks have offered more investment banking services. An

investment banking firm also does a large amount of consulting.

Through investment banking, an institution can generates funds in two

different ways. They may draw on public funds through the capital

market by selling stocks in their company, and they may also seek out

venture capital or private equity in exchange for a stake in their

company. Investment banking thus can be defined as a broader term

which covers both fund and fee based activities.

Over the decades, Investment Banking has transformed itself to suit the

technological needs of the world of finance. Investment bankers have

always enjoyed celebrity status, but at times have paid the price for

excessive flamboyance as well.


OVERVIEW:-

Investment Banking is an incredibly broad and multidimensional sector,

which is quite often misunderstood. Ranging from boutique subject

matter experts to multi-national, full-service conglomerates, there are

around 3,000 Investment Banks operating globally today. The term

Investment Bank is commonly used to define a financial firm which

assists in the raising of capital in the form of debt (bonds) and/or equity

(stocks). The term is used so frequently that its meaning often carries

misconceptions. Many financial institutions are involved in investment

banking to some extent; however, most have both investments banking

functions as well as sales & trading functions.

Many employees within an investment bank report into the Sales &

Trading division, where they can serve, for example, as Brokers or

Traders. These employees should not be considered ‘Investment

Bankers’ even as they are working for an investment bank. Simply put,

an investment bank is a financial institution that raises capital, trades

securities, insures bonds, and manages corporate mergers and

acquisitions in exchange for fees and commissions. Financial institutions

who partake in these activities employ licensed advisers who will

manage and provide advice on these transactions.

An investment bank’s clients can be either public or private corporations.

Because Investment Banking is a global industry, firms compete to be at

the forefront in their product offerings, assets, and technology. Once a

product is known to create large margins and draw in clients, it is normal

for other banks to mimic these products in attempt to retain a competitive

edge. All financial institutions, including investment banks, seek to


maximize their profitability by managing their level of risk; and for the

most part, the larger the risk, the larger the potential reward.

A distinction should be made between Investment Banking and

Commercial/Retail Banking. Commercial/Retail Banks are institutions

which make loans and accept deposits from clients. Commercial/Retail

Banking is a low margin, high transaction business whereas Investment

Banking is a high margin business with a relatively low volume of

transactions or “deals.” Although some Commercial/Retail Banks provide

investment banking services, these functions are separated.


INTRODUCTION:-

Investment banking is a very vast area in the field of banking and

finance. Investment banking includes a wide variety of activities,

including underwriting, selling, and trading securities, providing financial

advisory services, and managing assets. Investment banks cater to a

diverse group of stakeholders, companies, governments, non-profit

institutions, and individuals and help them raise funds on the capital

market.

Investment banking is a specific division of banking related to the

creation of capital for other companies. The work of an investment bank

begins right from the counseling before the underwriting sessions, and

stretches right till the securities are properly handled and distributed.

There are a number of investment banks that also provide highly

professional services in assisting their clients with industrial know-how

on various parameters.

Nevertheless, it would be unfair to conclude so, that over the decades,

backed by the evolution and also fuelled by recent technologies

developments, investment banking has transformed repeatedly to suit

the needs of the finance community and thus become one of the most

vibrant and exciting segment of financial services.


INVESTMENT BANKING:-

What is investment banking? Is it investing? Is it banking? Or is it

investing in banks? Really, it is neither. Investment banking, or I-

banking, as it is often called, is the term used to describe the business of

raising capital for companies and advising them on financing and merger

alternatives. Companies need cash in order to grow and expand their

business; investment banks sell securities to public investors in order to

raise this cash. These securities can come in the form of stocks or bonds

An investment bank is a financial institution which raises capital, trades

securities, and manages corporate mergers and acquisitions. Another

term used for investment banking is corporate finance. It includes raising

and managing funds, advising clients about investments and marketing

financial products.

In the words of, John. F. Marshall and M. E. Eills, “investment banking is

what investment banks do”. The definition can be explained in the

context of how investment banks have evolved in their functionality and

how history and regulatory inventions have shaped such an evolution.

Much of investment bank in its present form thus owes its origins to the

financial markets in the USA, due to which American Investment Banks

have been the leaders in the American and Euro markets as well.

Therefore the term ‘investment banking’ can arguably be said to be of

American origin.

Investment banks once contrasted sharply with commercial banks,

where people mainly deposited their money and sought commercial and

retail loans. In recent years, though, the two types of structures have


become increasingly similar; commercial banks now offer more

investment banking services as they attempt to corner the market by

presenting themselves as one-stop shops. Investment banks do differ

from brokerages and broker-dealers, though, even though those three

entities are often thought of as one and the same.

A brokerage firm takes a commission for assisting in the purchase and

sale of stocks, bonds, and mutual funds. A broker-dealer executes

similar functions, but it also trades for its own account. An investment

bank actually is a broker-dealer that provides corporations with financial

services, such as assistance with initial public offerings, merger and

acquisitions advice, and strategic planning.

Investment banking in the US is a very old industry and the top

investment banking firms have become MNCs with presence in most of

the countries across the globe. An investment bank is a financial

institution that assists individuals, corporations and governments in

raising capital by underwriting and/or acting as the client's agent in the

issuance of securities. An investment bank may also assist companies

involved in mergers and acquisitions, and provide ancillary services such

as market making, trading of derivatives, fixed income instruments,

foreign exchange, commodities, and equity securities.

Investment banks are financial entities that primarily help businesses

raise funds through the sale of securities. They differ from commercial

banks in that they do not take deposits. Investment bankers facilitate the

movement of investment capital, from large investment funds at

institutions, into corporations for expansion and general corporate

purposes.


SIZE OF THE INDUSTRY:-

Global investment banking revenue increased for the fifth year running in

2007, to a record US$84.3 billion. This was up 22% on the previous year

and more than doubles the level in 2003. Subsequent to their exposure

to United States sub-prime securities investments, many investment

banks have experienced losses since this time.

The United States was the primary source of investment banking income

in 2007, with 53% of the total, a proportion which has fallen somewhat

during the past decade. Europe (with Middle East and Africa) generated

32% of the total, slightly up on its 30% share a decade ago. Asian

countries generated the remaining 15%. Over the past decade, fee

income from the US increased by 80%. This compares with a 217%

increase in Europe and 250% increase in Asia during this period. The

industry is heavily concentrated in a small number of major financial

centers, including City of London, New York City, Hong Kong and Tokyo.


FUNCTIONS OF INVESTMENT BANKS:-

Investment banks carry out multilateral functions. Some of the most

important functions of investment banking are as follows:

Investment banking help public and private corporations in issuing

securities in the primary market, guarantee by standby

underwriting or best efforts selling and foreign exchange

management. Other services include acting as intermediaries in

trading for clients.

Investment banking provides financial advice to investors and

helps them by assisting in purchasing and trading securities as

well as managing financial assets

Investment banking differs from commercial banking in the sense

that they don't accept deposits and grant retail loans. However the

dividing line between the two fraternal twins has become flimsy

with loans and securities becoming almost substitutable ways of

raising funds.

They also helping companies raise money by assisting in initial

public offerings (IPO), helping companies issue debt, providing

research to companies and advising companies on deals such as

acquisitions and mergers.


INVESTMENT BANKER:-

A person representing a financial institution that is in the business of

raising capital for corporations and municipalities is called as an

Investment Banker. An investment banker may not accept deposits or

make commercial loans. Investment bankers are the people who do the

ground work for IPOs and bond issues.

An Investment Banker can be considered as a total solutions provider for

any corporate, desirous of mobilizing its capital. The services provided

range from investment research to investor service on the one hand and

from preparation of the offer documents to legal compliances and post

issue monitoring on the other. A long lasting relationship exists between

the Issuer Company and the Investment Banker.

Investment banking is a particular form of banking that finances capital

requirements of an enterprise. Investment bankers help companies and

governments and their agencies to raise money by issuing and selling

securities in the primary market. They assist public and private

corporations in raising funds in the capital markets (both equity and

debt), as well as in providing strategic advisory services for mergers,

acquisitions and other types of financial transactions. Investment

bankers are regarded as those persons who generally give consultation

to their valued clients in order to sort out any of their high level issues

that may have taken place in their financial organization.

The Investment Banks as well as the investment bankers earn profit by

charging fees and commissions for providing these services and other

kinds of financial and business advice.


RESPONSIBILITIES OF THE INVESTMENT BANKERS:-

Apart from advising the investment bankers also performs various

functions such as:

Investment bankers administer the bonds-issuance.

Recommend and perform way-out to take over and collaborate

with other organization.

Control the selling of the stock of their organization to the general

public.

They also play the role of strategists in order to solve out financial

problems of their clients.

They also help the clients to develop their financial policies and

also apply them.

Even investment bankers act as the vital figures in molding

economies of the entire globe, managing collaborators of

multibillion-dollar conglomerates and tackling the Government

asset's privatization.

Investment bankers also emerge new innovative ideas and

schemes for developing strategies to pitch to clients.

Prepare monetary analyses and documents.

Work with the sales teams of their banks in selling the bonds and

stocks which are produced by the investment-banking

department's activities.

Investment banker also represents an economic establishment

that is in the business of increasing capital for corporations and

municipalities.

Even Investment bankers do the grunt work for IPO's and bond

issues.


An investment banker at cosmopolitan standard also possesses

banking panels which are controlled by superior associates who

have authority and experience in their clients throughout the world.

Investment bankers provide access to dedicated assistance which

is featured by commitment to national markets and an

understanding of the profitable and edifying differences between

various countries.

The investment banks can enjoy an unexpected stage of strong

economic conditions and growth which enables them to transport

trace gain through the advice of the investment banker.

Even it is the work of the investment bankers to spotlight on people

and cost control in the present situation also suggests controlling

economy during good and bad times.

The major concentration in the investment banking industry has

always been on growth at utmost level rather than diminishing cost

and competence. But investment bankers take care of all the

aspects thoroughly in a very efficient manner so that improvement

takes place in the entire segment.

The investment bankers maintains and performs all the functions

in a very effective procedure without any loss incurred on the firms

or organizations as the total financial and investment filed are

governed by him.


HISTORY OF THE INVESTMENT BANKS:-

A Snapshot History of Investment Banking:

Investment banking practices such as extending credit to merchants

date back to ancient times. In the 1600s, early investment institutions

such as acceptance houses and merchant banks helped finance foreign

trade and accumulated funds for long-term investments overseas.

The nineteenth century saw the rise of several prominent banking

partnerships such as those created by Rothschild’s, the Barings and the

Browns. These firms had their origins in the Atlantic trade; financing the

importation of commodities for European manufacturers and helping

them export their finished products around the world.

In the United States, investment banking received a boost during the

American Civil War. Syndicate banking houses sold millions of dollars’

worth of government bonds to large numbers of individual investors to

help finance the war. This marked the first mass-market securities sales

operation, a practice that continued later in the 1800s to finance the

expansion of the transcontinental railroads.

The 1800s also saw the birth of some of the most famous firms in

investment banking, many of which are still with us, in one form or

another, 150 years later. The firm of J. P. Morgan played a major role in

the corporate mergers of the era, such as the merger of U.S. Steel Corp

and the Northern Pacific and Great Northern railroads. The firm grew to

such size and prominence at the turn of the century that J.P. Morgan,


the founder, is credited for “saving” Wall Street during the banking crisis

of 1907 by allegedly locking top executives from major banks in his office

until they hammered out a solution.

Goldman Sachs was founded in 1869 by German Jewish immigrants

Marcus Goldman who later partnered with his son-in-law, Samuel Sachs.

Goldman Sachs was among the pioneers of the initial public offering

(IPO), and managed one of the largest IPOs at that time, for Sears,

Roebuck and Company in 1906.

In the early twentieth century, investment banking expanded

dramatically. One reason was an increase in the number of individuals

who owned stock, something that resulted from the prosperous years

after the First World War. However, the ensuing run-up in stock prices

created an unsustainable bubble that finally collapsed with the Great

Depression in 1929. The U.S. plunged into one of the worst depressions

in history. More than 11,000 banks failed or merged, and a quarter of the

population was out of work.

The excesses of that period and the many bank failures led to a flood of

new regulations to protect investors from fraudulent stock promoters and

stabilize the banking system. It led to the passing of the Federal

Securities Act of 1933, which required “full disclosure” of accurate

information for publicly offered securities and a prospectus filed with the

Securities and Exchange Commission.

More importantly for investment banks, the government passed the

Glass-Steagall Act in 1933, which compelled commercial banks to

separate themselves from their securities distribution arms. Large


universal banks such as JP Morgan, for instance, split into separate

entities. In JP Morgan’s case, it created JP Morgan as a commercial

bank, Morgan Stanley as an investment bank, and Morgan Grenfell, as a

British merchant bank. The Glass-Steagall Act remained in force until it

was repealed during the Clinton administration in 1999.

The Glass-Steagall Act (or more specifically, the Bank Act of 1933) was

enacted by the government with the intent of rehabilitating the banking

industry by erecting a wall between commercial banking and investment

banking.

The Glass-Steagall Act said that commercial banks can lend money,

extend lines of credit, and open checking and savings accounts, while

investment banks can underwrite securities, advice on M&A, and provide

institutional brokerage services. It also compelled commercial banks to

separate themselves from their securities distribution arms.


Investment Banking History in the 20th Century:

In the mid-20th century, large investment banks were dominated by the

dealmakers. Advising clients on mergers and acquisitions and public

offerings was the main focus of major Wall Street partnerships. These

“bulge bracket” firms included Goldman Sachs, Morgan Stanley, Lehman

Brothers, First Boston and others.

That trend began to change in the 1980s as a new focus on trading

propelled firms such as Salomon Brothers, Merrill Lynch and Drexel

Burnham Lambert into the limelight. Investment banks earned an

increasing amount of their profits from proprietary trading. Advances in

computing technology also enabled banks to use more sophisticated

model driven software to execute trades and generate a profit on small

changes in market conditions.

In the 1980s, financier Michael Milken popularized the use of high yield

debt (also known as junk bonds) in corporate finance and mergers and

acquisitions. This fueled a boom in leverage buyouts and hostile

takeovers. Filmmaker Oliver Stone immortalized the spirit of the times

with his movie, Wall Street, in which Michael Douglas played the role of

corporate raider Gordon Gekko and epitomized corporate greed.

Investment banks profited handsomely during the boom years of the

1990s and into the tech boom and bubble. When the tech bubble burst,

it precipitated a string of new legislation to prevent conflicts of interest

within investment banks. Investment banking research analysts had

been actively promoting stocks to investors while privately

acknowledging they were not attractive investments. In other instances,


analysts gave favorable stock ratings to corporate clients in the hopes of

attracting them as investment banking clients and handling potentially

lucrative initial public offerings.

These scandals paled by comparison to the financial crisis that has

enveloped the banking industry since 2007. The speculative bubble in

housing prices along with an overreliance on sub-prime mortgage

lending trigged a cascade of crises. Two major investment banks, Bear

Stearns and Lehman Brothers, collapsed under the weight of failed

mortgage-backed securities. In March, 2008, the Federal government

began using a variety of taxpayer-funded bailout measures to prop up

other firms. The Federal Reserve offered a $30 billion line of credit to

J.P. Morgan Chase to that it could acquire Bear Sterns. Bank of America

acquired Merrill Lynch. The last two bulge bracket investment banks,

Goldman Sachs and Morgan Stanley, elected to convert to bank holding

companies and be fully regulated by the Federal Reserve.

Moving forward, the recent financial crisis has weakened both the

reputation and the dominance of U.S. investment banking organizations

throughout the world. The growth of foreign capital markets along with

an increase in pools of sovereign capital is changing the landscape of

the industry.

The growing international flow of capital has also opened up

opportunities for investment banking in new financial centers around the

world, including those in developing countries such as India, China and

the Middle East.


EVOLUTION OF INDIAN INVESTMENT BANKING:-

The origin of investment banking in India can be traced back to the

19thcentury when European merchant banks set-up their agency houses

in the country to assist in the setting of new projects. In the 20th century,

large business houses followed suit by establishing managing agencies

which acted as issue house for securities, promoters for new projects,

etc. The peculiar feature of these agencies was that their services were

restricted only to the companies of the group to which they belonged. A

few small brokers also started rendering Merchant banking services, but

theirs was limited due to their small capital base.

In India, though the existence of this branch of financial services can be

traced to over three decades, investment banking was largely confined

to merchant banking services. The forerunners of merchant banking in

India were the foreign banks; Grindlays Bank (now merged with

Standard Chartered Bank in India) began merchant banking operations

in 1967 with a licence from the RBI followed by the Citibank in 1970.

These two banks were providing services for syndication of loans and for

raising of equity apart from advisory services. The foreign banks

monopolized merchant banking services in the country.

It was in 1972, that the Banking Commission Report, asserted the need

for merchant banking services in India by the public sector banks. Based

on the American experience, which led to the passage of the Glass-

Steagall Act, the Commission recommended a separate structure for

merchant banks distinct from commercial banks and financial

institutions. Merchant banks were meant to manage investments and

provide advisory services.


Following the above recommendations, the State Bank of India (SBI)

ventured into this business by starting a merchant banking division in

1972. Other banks such as the Bank of India, Central Bank of India,

Bank of Baroda (BOB), Syndicate Bank, Punjab National Bank (PNB),

Canara Bank followed the suit to set up their Merchant Banking outfits.

In 1973, ICICI became the first financial institution to offer merchant

banking services. JM finance was set-up by Mr. Nimesh Kampani as an

exclusive merchant bank in 1973.

The growth of the industry was very slow during this period. By 1980, the

number of merchant banks rose to 33 and was set-up by commercial

banks, financial institutions and private sector. The capital market

witnessed some buoyancy in the late eighties. The advent of economic

reforms in 1991 resulted in sudden spurt in both the primary and

secondary market. Several new players entered into the field. The later

entrants were IFCI (Industrial Finance Corporation of India) and IDBI

(Industrial Development Bank of India) with the latter setting up its

merchant banking division in 1992.

The advent of SEBI in 1992 was a major boost to the merchant banking

activities in India and the activities were further propelled by the

subsequent introduction of free pricing of primary market equity issues in

1992. Post-1992, there was lot of fluctuations in the issue market

affecting the merchant banking industry. SEBI started regulating the

merchant banking activities in 1992 and a majority of the merchant

bankers were registered with it. The number of merchant bankers

registered with SEBI began to dwindle after the mid-nineties due to the

inactivity in the primary market. Many of the merchant bankers were into

issue management or associated activity such as underwriting or


advisory. Many merchant bankers succumbed to the downturn in the

primary market because of the over-dependence on issue management

activity in the initial years. Also not all the merchant bankers were able to

transform themselves into full-fledged investment banks. Currently

bigger industry players who are in investment banking are dominating

the industry. SEBI had four categories of merchant bankers with varying

eligibility criteria based on their net worth. The highest number of

registered merchant bankers with SEBI as at the end of March 2003 was

124, from a peak of almost thousand in the nineties. In the financial year

2002-2003 itself, the number decreased by 21.

However, by the mid-eighties and early nineties, most of the merchant

banking divisions of public sector banks were spun off as separate

subsidiaries. SBI set up SBI Capital Markets Ltd in 1986. Other such as

Canara Bank, BOB, PNB, Indian Bank and ICICI created separate

banking entities. IDBI created IDBI Capital Markets much later since

Merchant banking was initially formed as a division if IDBI in 1992.

Many foreign investment banks started entering Indian markets like.

These firms had a huge capital base, global distribution capacity and

expertise. However, they were new to Indian markets and lacked local

penetration. Many of the top rung Indian merchant banks, who had string

domestic base, started entering into joint ventures with the foreign

banks. This energy resulted in synergies as their individual strength

complemented each other.


REGULATORY FRAMEWORK FOR INVESTMENT BANKING IN INDIA:-

An overview of the regulatory framework is furnished below:

All investment banks incorporated under the Companies Act, 1956

are governed by the provisions of that Act.

Those investment banks that are incorporated under a separate

statute are regulated by their respective statute. Ex: SBI, IDBI.

Universal banks that function as investment banks are regulated

by RBI under the RBI Act, 1934.

All Non-banking Finance Companies that function as investment

banks are regulated by RBI under RBI Act, 1934.

SEBI governs the functional aspects of Investment banking under

the Securities and Exchange Board of India Act, 1992.

Those investment banks that carry foreign direct investment either

through joint ventures or as fully owned subsidiaries are governed

by Foreign Exchange Management Act, 1999 with respect to

foreign investment.


CONSTRAINTS IN INDIAN INVESTMENT BANKING:-

Due to the over-dependence on issue management activity in the initial

years, most merchant banks perished in the primary market downturn

that followed later. In order to stabilize their businesses, several

merchant banks diversified to offer a broader spectrum of capital market

services. However, other than a few industry leaders, the other merchant

banks have not been able to transform themselves into full service

investment banks.

Going by the service portfolio of the leading full service investment

banks in India, it may be said that the industry in India has seen more or

less similar development as its western counterparts, though the breadth

available in the overseas capital market is still not present in the Indian

capital market. Secondly, due to the lack of institutional financing in a big

way to fund capital market activity, it is only the bigger industry players

who are in investment banking. The third major deterrent has also been

the lack of depth in the secondary market, especially in the corporate

debt segment.


INVESTMENT BANKS’ ORGANIZATIONAL STRUCTURE / CORE BUSINESS OF INVESTMENT BANKERS:- Investment banks offer services to both corporations issuing securities

and investors buying securities. For corporations, investment bankers

offer information on when and how to place their securities on the open

market, an activity very important to an investment bank's reputation.

Therefore, investment bankers play a very important role in issuing new

security offerings.

While large service investment banks offer all lines of business, both sell

side and buy side; smaller investment banks may specialize in either of

them.

An Investment Bank basically undertakes Two Lines of Business:

Sell Side Investment Firms:

All the insider functions might be termed as the ‘sell side’. This is trading

securities for cash or securities (i.e., facilitating transactions, market-

making), or the promotion of securities (i.e. underwriting, research, etc.).

Smaller sell side investment firms such as boutique investment banks

and small broker-dealers focus on investment banking and

sales/trading/research, respectively.

Being in the sell side it trades securities either for cash or for other

securities by facilitating transactions and making market. Underwriting

and carrying research work for the promotion of securities are the other


roles it performs as an insider. The sell side typically refers to selling

shares of newly issued IPOs, placing new bond issues, engaging in

market making services, or helping clients facilitate transactions.

Buy Side Investment Firms:

All the outsider functions sometimes may be coined as the ‘buy side’.

The "buy side" constitutes the pension funds, mutual funds, hedge

funds, and the investing public who consume the products and services

of the sell-side in order to maximize their return on investment. The buy

side, in contrast, works with pension funds, mutual funds, hedge funds,

and the investing public to help them maximize their returns when

trading or investing in securities such as stocks and bonds.

This is how an Investment bank offers services to both corporations &

investors helping the earlier in issuing securities and the later in buying

them but maintaining the Chinese wall to prevent information from

crossing, that is blocking the classified information of a company to be

disclosed in public and vice versa.


Investment banks are split up into front office, middle office, and back

office. Each sector is very different yet plays an important role in making

sure that the bank makes money, manages risk, and runs smoothly.

ORGANIZATIONAL STRUCTURE OF

INVESTMENT BANKS/

BUSINESS OF INVESTMENT

BANKERS

LINES OF BUSINESS

BUY SIDE

SELL SIDE

CORE ACTIVITIES

FRONT OFFICE

MIDDLE OFFICE

BACK OFFICE

OTHER BUSINESSES


FRONT OFFICE:-

The front office generates the bank’s revenue and consists of three

primary divisions: investment banking, sales & trading, and research.

Investment Banking:

Investment Banking/Corporate Finance is the traditional aspect of

investment banks which involves helping customers raise funds in the

Capital Markets and advising on mergers and acquisitions. A pitch book

of financial information is generated to market the bank to a potential

M&A client; if the pitch is successful, the bank arranges the deal for the

client by preparing all materials necessary for the transaction as well as

the execution of the deal, which may involve subscribing investors to a

security issuance, coordinating with bidders, or negotiating with a merger

target. This may involve subscribing investors to a security issuance,

coordinating with bidders, or negotiating with a merger target.

The investment banking division (IBD) is generally divided into industry

coverage and product coverage groups.

Industry Coverage Groups:-

Industry coverage groups focus on a specific industry, such as

healthcare, industrials, or technology, and maintain relationships with

corporations within the industry to bring in business for a bank.


Product Coverage Groups:-

Product coverage groups focus on financial products, such as mergers

and acquisitions, leveraged finance, public finance, asset finance and

leasing, structured finance, restructuring, equity, and high-grade debt

and generally work and collaborate with industry groups on the more

intricate and specialized needs of a client.

Sales and Trading:

On behalf of the bank and its clients, a large investment bank's primary

function is buying and selling products. In market making, traders will

buy and sell financial products with the goal of making money on each

trade.

Sales is the term for the investment bank's sales force, whose primary

job is to call on institutional and high-net-worth investors to suggest

trading ideas (on a caveat emptor basis) and take orders. Sales desks

then communicate their clients' orders to the appropriate trading desks,

which can price and execute trades, or structure new products that fit a

specific need.

Structuring has been a relatively recent activity as derivatives have come

into play, with highly technical and numerate employees working on

creating complex structured products which typically offer much greater

margins and returns than underlying cash securities.


In 2010, investment banks came under pressure as a result of selling

complex derivatives contracts to local municipalities in Europe and the

US.

Strategists advise external as well as internal clients on the strategies

that can be adopted in various markets. Ranging from derivatives to

specific industries, strategists place companies and industries in a

quantitative framework with full consideration of the macroeconomic

scene. This strategy often affects the way the firm will operate in the

market, the direction it would like to take in terms of its proprietary and

flow positions, the suggestions salespersons give to clients, as well as

the way new products are created.

Banks also undertake risk through proprietary trading, performed by a

special set of traders who do not interface with clients and through

"principal risk"—risk undertaken by a trader after he buys or sells a

product to a client and does not hedge his total exposure. Banks seek to

maximize profitability for a given amount of risk on their balance sheet.

Research:

The research division reviews companies and writes reports about their

prospects, often with "buy" or "sell" ratings. While the research division

may or may not generate revenue (based on policies at different banks),

its resources are used to assist traders in trading, the sales force in

suggesting ideas to customers, and investment bankers by covering

their clients.


Research also serves outside clients with investment advice (such as

institutional investors and high net worth individuals) in the hopes that

these clients will execute suggested trade ideas through the sales and

trading division of the bank, and thereby generate revenue for the firm.

There is a potential conflict of interest between the investment bank and

its analysis, in that published analysis can affect the bank's profits.

Hence in recent years the relationship between investment banking and

research has become highly regulated, requiring a Chinese wall

between public and private functions.

FRONT OFFICE

INVESTMENT BANKING

INDUSTRY COVERAGE

GROUPS

PRODUCT COVERAGE

GROUPS

SALES & TRADING

RESEARCH


MIDDLE OFFICE:-

Middle office typically includes risk management, financial control,

corporate treasury, corporate strategy, and compliance. Ultimately, the

goal of the middle office is to ensure that the investment bank doesn’t

engage in certain activities that could be detrimental to the bank’s overall

health as a firm. In capital raising, especially, there is significant

interaction between the front office and middle office to ensure that the

company is not taking on too much risk in underwriting certain securities.

Risk Management:

Risk Management involves analyzing the market and credit risk that

traders are taking onto the balance sheet in conducting their daily

trades, and setting limits on the amount of capital that they are able to

trade in order to prevent 'bad' trades having a detrimental effect to a

desk overall.

Another key Middle Office role is to ensure that the above mentioned

economic risks are captured accurately (as per agreement of

commercial terms with the counterparty) correctly (as per standardized

booking models in the most appropriate systems) and on time (typically

within 30 minutes of trade execution).

In recent years the risk of errors has become known as "operational risk"

and the assurance Middle Offices provide now include measures to

address this risk. When this assurance is not in place, market and credit

risk analysis can be unreliable and open to deliberate manipulation.


Corporate Treasury:

Treasury management (or treasury operations) includes management of

an enterprise's holdings, with the ultimate goal of maximizing the firm's

liquidity and mitigating its operational, financial and reputational risk.

Treasury Management includes a firm's collections, disbursements,

concentration, investment and funding activities. In larger firms, it may

also include trading in bonds, currencies, financial derivatives and the

associated financial risk management. The corporate treasury

department is responsible for an investment bank's funding, capital

structure management, and liquidity risk monitoring. Larger banks have

whole departments devoted to treasury management and supporting

their clients' needs in this area.

Bank Treasuries may have the following departments:

Fixed Income or Money Market Desk: A Fixed Income or Money

Market desk that is devoted to buying and selling interest bearing

securities.

Foreign Exchange or "FX" Desk: A Foreign exchange or "FX"

desk that buys and sells currencies.

Capital Markets or Equities Desk: A Capital Markets or Equities

desk that deals in shares listed on the stock market.

Proprietary Trading Desk: A Proprietary Trading desk that

conducts trading activities for the banks own account and capital.


Asset Liability Management or ALM Desk: An Asset liability

management or ALM desk that manages the risk of interest rate

mismatch and liquidity.

Transfer Pricing or Pooling Function: A Transfer pricing or pooling

function that prices liquidity for business lines (the liability and

asset sales teams) within the bank.

Finance Control / Internal Control:

Financial control tracks and analyzes the capital flows of the firm; the

Finance division is the principal adviser to senior management on

essential areas such as controlling the firm's global risk exposure and

the profitability and structure of the firm's various businesses via

dedicated trading desk product control teams. In the United States and

United Kingdom, a Financial Controller is a senior position, often

reporting to the Chief Financial Officer.

In accounting and auditing, internal control is defined as a process

affected by an organization's structure, work and authority flows, people

and management information systems, designed to help the

organization accomplish specific goals or objectives. It is a means by

which an organization's resources are directed, monitored, and

measured. It plays an important role in preventing and detecting fraud

and protecting the organization's resources, both physical (e.g.,

machinery and property) and intangible (e.g., reputation or intellectual

property such as trademarks).


Corporate Strategy / Strategic Management:

Strategic management analyzes the major initiatives taken by a

company's top management on behalf of owners, involving resources

and performance in external environments. It entails specifying the

organization's mission, vision and objectives, developing policies and

plans, often in terms of projects and programs, which are designed to

achieve these objectives, and then allocating resources to implement the

policies and plans, projects and programs. A balanced scorecard is often

used to evaluate the overall performance of the business and its

progress towards objectives. Strategic management can depend upon

the size of an organization, and the propensity to change of its business

environment. Strategic management can occur at corporate, business,

functional and operational levels.

The two main approaches are opposite but complement each other.

Industrial Organizational Approach:-

The Industrial Organizational approach is based on economic theory and

deals with issues such as competition, resource allocation and

economies of scale. It assumes rationality and targets profit

maximization.

Sociological Approach:-

The Sociological Approach deals primarily with human interactions and

assumes bounded rationality, satisficing behavior and lower profits.


Strategic management can be viewed as bottom-up, top-down, or

collaborative.

Bottom-Up Approach:-

In the bottom-up approach, employees submit proposals to their

managers who funnel the best ideas up the ladder. This is often part of a

capital budgeting process. Proposals are assessed using financial

criteria such as return on investment or cost-benefit analysis. Incorrect

estimates of costs and benefits are common errors. Approved proposals

implicitly form the substance of the strategy without a strategic design or

architect.

Top-Down Approach:-

The top-down approach is the most common by far. In it, the CEO and

the Board of Directors, decides on the overall direction the company

should take. The strategy flows down through the organization as each

unit adapts to the new approach.

Collaborative Techniques:-

Some organizations employ collaborative techniques that surface new

ideas in the process leveraging advances in information technology. It is

felt that knowledge management systems should be used to share

information and create common goals. Strategic divisions are thought to

hamper this process.


Compliance Department:

The department or unit within a brokerage firm, bank or financial

institution that ensures compliance with all applicable laws, rules and

regulations is the compliance department. The compliance department

generally has a wide range of roles and responsibilities within a firm.

Depending on the business of the financial institution, these duties may

range from monitoring trading activity, preventing conflicts of interest and

ensuring compliance with regulations at brokerage firms, to preventing

money laundering and potential tax evasion at large banks.

As a firm's internal police force, the compliance department is unlikely to

be the most popular unit in a firm. However, a competent compliance

department is of the utmost importance in maintaining a firm's integrity

and reputation. Compliance demands for most financial firms increased

regulatory oversight significantly in the wake of the 2008 credit crisis.

This has led to increased demand for experienced compliance staff.

Although compliance costs have spiraled higher in recent years, the

costs of non-compliance - even if inadvertent - can be far greater for a

financial institution. Non-compliance may lead to stiff monetary fines,

legal and regulatory sanctions, and loss of reputation.


MID

DLE

OFF

ICE

RISK MANAGEMENT

CORPORATE TREASURY

FIXED INCOME/MONEY MARKET DESK

FOREIGN EXCHANGE/FX DESK

CAPITAL MARKTS/EQUITES DESK

PROPREITARY DESK

ASSET LIABILTY MANAEGEMENT/ALM

DESK

TRANSFER PRICING/POOLING

FUNCTION

INTERNAL/FINANCE CONTROL

CORPORATE STRATEGY/STRATEGIC

MANAGEMENT

INDUSTRIAL ORGANIZATIONAL

APPROACH

SOCIOLOGICAL APPROACH

BOTTOM-UP APPROACH

TOP-DOWN APPROACH

COLLABORATIVE APPROACH

COMPLIANCE DEPARTMENT


BACK OFFICE:-

The back office services include the nuts and bolts of the investment

bank. While it provides the greatest job security of the divisions within an

investment bank, it is a critical part of the bank that involves managing

the financial information of the bank and ensures efficient capital

markets through the financial reporting function. The staff in these areas

are often highly qualified and need to understand in depth the deals and

transactions that occur across all the divisions of the bank.

The back office jobs are often considered unglamorous and some

investment banks outsource these types of businesses. Nevertheless,

they allow the whole thing to run. Without them, nothing else would be

possible.

The back office provides the support so that the front office can do the

jobs needed to make money for the investment bank.

Typically the back office job includes operations and technology.

Operations:

This involves data-checking trades that have been conducted, ensuring

that they are not erroneous, and transacting the required transfers. It

handles things such as trade confirmations, ensuring that the correct

securities are bought, sold, and settled for the correct amounts. Many

banks have outsourced operations. It is, however, a critical part of the

bank. Due to increased competition in finance related careers, college


degrees are now mandatory at most Tier 1 investment banks. A finance

degree has proved significant in understanding the depth of the deals

and transactions that occur across all the divisions of the bank.

Technology:

Every major investment bank has considerable amounts of in-house

software, created by the technology team, who are also responsible for

technical support. The software and technology platforms that allow

traders to do their job are state-of-the-art and functional, the creation of

new trading algorithms, and more. Technology has changed

considerably in the last few years as more sales and trading desks are

using electronic trading. Some trades are initiated by complex algorithms

for hedging purposes.

BACK OFFICEOPERATIONS

TECHNOLOGY


OTHER BUSINESSES:-

Other potential divisions that an investment bank may include are: global

transaction banking, commercial banking, merchant banking and

investment management.

Global Transaction Banking:

Global transaction banking is the division which provides cash

management, custody services, lending, and securities brokerage

services to institutions. It is mainly responsible for managing and

developing the flow business with corporate clients and financial

institutions. Prime brokerage with hedge funds has been an especially

profitable business, as well as risky, as seen in the "run on the bank"

with Bear Stearns in 2008.

Global transaction services (GTS) consist in a comprehensive range of

commercial banking products and services, mainly addressed to

corporate clients and financial institutions, offered by global transaction

banking units. They include domestic and cross-border payments,

professional risk management and international trade financing.

Each bank, however, offers a different set of products, which can range

from cash management, trade finance, structured trade & export finance,

cash and clearing, and global securities services to supply chain

management. Regardless of the specific bank’s offer, the common factor

in all transaction services is the ability to support asset-intensive

business by providing cheap and stable funding through both the good

and bad times.


Commercial Banking:

A commercial bank (or business bank) is a type of financial institution

and intermediary. It is a bank that lends money and provides

transactional, savings, and money market accounts and that accepts

time deposits. A commercial bank is a financial institution that provides

services, such as accepting deposits, giving business loans and auto

loans, mortgage lending, and basic investment products like savings

accounts and certificates of deposit. Commercial banking activities are

different than those of investment banking.

Commercial banks engage in the processing of payments by way of

telegraphic transfer, EFT, internet banking, or other means, issuing bank

drafts and bank cheques, accepting money on term deposit, lending

money by overdraft, installment loan, or other means, providing

documentary and standby letter of credit, guarantees, performance

bonds, securities underwriting commitments and other forms of off

balance sheet exposures, safekeeping of documents and other items in

safe deposit boxes, sales, distribution or brokerage, with or without

advice, of: insurance, unit trusts and similar financial products as a

“financial supermarket”, cash management and treasury, merchant

banking and private equity financing.

Traditionally, large commercial banks also underwrite bonds, and make

markets in currency, interest rates, and credit-related securities, but

today large commercial banks usually have an investment bank arm that

is involved in the mentioned activities.


Merchant Banking:

Merchant Banking is a combination of Banking and consultancy

services. Merchant banking can be called "very personal banking";

merchant banks offer capital in exchange for share ownership rather

than loans, and offer advice on management and strategy. Merchant

banking is also a name used to describe the private equity side of a firm.

Merchant Bank is a bank that deals mostly in (but is not limited to)

international finance, long-term loans for companies and underwriting.

Merchant banks do not provide regular banking services to the general

public. Merchant banks are intermediaries that provide brokerage, fund-

raising, and financial advisory services on a large scale to businesses

and a smaller scale to wealthy individuals.

In the United Kingdom, the term "merchant bank" refers to an investment

bank. Both commercial banks and investment banks may engage in

merchant banking activities.

Historically, merchant banks' original purpose was to facilitate and/or

finance production and trade of commodities, hence the name

"merchant". Few banks today restrict their activities to such a narrow

scope. Modern merchant banks offer a wide range of activities, including

issue management, portfolio management, credit syndication,

acceptance credit, counsel on mergers and acquisitions, insurance, etc.


Investment Management:

Investment management is the professional management of various

securities (shares, bonds, etc.) and other assets (e.g., real estate), to

meet specified investment goals for the benefit of investors. Investors

may be institutions (insurance companies, pension funds, corporations

etc.) or private investors (both directly via investment contracts and more

commonly via collective investment schemes e.g., mutual funds).

Investment management is a generic term that most commonly refers to

the buying and selling of investments within a portfolio. Investment

management can also include banking and budgeting duties, as well as

taxes. But the term most often refers to portfolio management and the

trading of securities to achieve a specific investment objective.

The provision of investment management services includes elements of

financial statement analysis, asset selection, stock selection, plan

implementation and ongoing monitoring of investments. The investment

management division of an investment bank is generally divided into

separate groups, often known as Private Wealth Management and

Private Client Services. Fund manager (or investment adviser in the

United States) refers to both a firm that provides investment

management services and an individual who directs fund management

decisions.

The largest financial fund managers are firms that exhibit all the

complexity their size demands. Apart from the people who bring in the

money (marketers) and the people who direct investment (the fund

managers), there are compliance staff (to ensure accord with legislative

and regulatory constraints), internal auditors of various kinds (to examine


internal systems and controls), financial controllers (to account for the

institutions' own money and costs), computer experts, and "back office"

employees (to track and record transactions and fund valuations for up

to thousands of clients per institution).

OTHER BUSINESSES

GLOBAL TRANSACTION

BANKINGCOMMERCIAL

BANKINGMERCHANT BANKING

INVESTMENT MANAGEMENT


TYPES OF INVESTMENT BANKS:-

Full-Service Global Investment Banks:

Full-Service Global Investment Banks are large institutions who provide

a complete set of services to their clients with top expertise in most

areas, and who operate on a global basis. These are investment banks

that serve large corporates, usually multi-national Companies. A full-

service investment bank, by definition, offers corporate clients a pool of

services, including raising capital in both public and private markets,

trading securities, and managing corporate mergers and acquisitions.

Regional Investment Banks:

Regional investment banks differ from full-service banks in exactly the

manner in which their name implies their operations are concentrated in

a particular region. Regional Investment Banks are focused in a specific

area with specialized geographic knowledge and a variety of product

offerings. These firms are also known as “Specialty Investment Banks”.

Boutique Investment Banks:

Boutiques are much smaller firms who specialize in a particular product

or industry. Boutiques are often started by successful bankers who leave

the larger firms with their extensive networks for the prestige and money

associated with their own firm.


Boutique firms are small investment banks organized at local level and

specialize in a particular industry or product. They are independent firms

whose focus is on advisory services such as M&A. Because of their

expertise, they are better advisors in particular deals. They provide

personalized services to their clients and try to be more of partners

rather than merely being advisors.

These firms may specialize by industry, client asset size, banking

transaction type or by other factors to address a market not well

addressed by larger firms. Although they may lack some of the

resources of larger firms, boutique firms aim to offer more individualized

services and tailor their offerings to the needs of their clients.


SWOT ANALYSIS OF THE INVESTMENT BANKS:-

STRENGTHS:-

Strong Management:

Strong management can help Investment banks reach its potential by

utilizing strengths and eliminating weaknesses. Strong Management has

a significant impact, so an analyst should put more weight into it.

Cost Advantages:

Lower costs lead to higher profits for the Investment banks. A low cost

leader can undercut rivals on price.

Economies of Scale:

Economies of scale are the cost advantages that the investment bank

obtains due to size. The greater the volume, the greater the advantages

it has.

Unique Products:

Unique products help distinguish Investment banks from its competitors.

Investment banks can charge higher prices for their products, because

consumers can’t get those products elsewhere.


Brand Name:

A strong brand name is a major strength of the Investment banks. This

gives the investment banks the ability to charge higher prices for their

products because consumers place additional value in the brand.

Technology:

Superior technology allows Investment banks to better meet the needs

of their customers in ways that competitors can’t imitate.

Proficient Employees:

The major strength of any sector is its employees. In Investment

banking, all the work is done by professionals because it requires skillful

and specialized knowledge about the subject matter.


WEAKNESSES:-

Outdated Technology:

A lack of proprietary technology and patents can hurt the investment

banks ability to compete against rivals.

High Debt Burden:

A high debt burden increases the risk that the investment bank goes

bankrupt if they make a poor business decision. Increasing risks can

increase investment banks’ debt interest payments.

Cost Structure:

A weak cost structure means the investment banks’ costs are high in

comparison to its competitors.

Lack of Scale:

A lack of scale means that the investment banks cost per unit of output

is very high. Increasing volume, while maintaining the quality, would help

reduce those costs.


OPPORTUNITIES:-

Innovation:

Greater innovation can help the investment banks to produce unique

products and services that meet customer’s needs.

New Services:

New services help the investment banks to better meet their customer’s

needs. These services can expand the investment banks business and

diversify their customer base.

Emerging Markets:

Emerging markets are fast growing regions of the world that enable the

investment banks to quickly expand.

New Technology:

New technology helps the investment banks to better meet their

customer’s needs with new and improved products and services.

Technology also builds competitive barriers against rivals.

New Products:

New products can help the investment banks to expand their business

and diversity their customer base.


International Expansion:

International markets offer the investment banks new opportunities to

expand the business and increase sales.


THREATS:-

Intense Competition:

Intense competition can lower the investment banks’ profits, because

competitors can entice consumers away with superior products. Intense

Competition has a significant impact, so an analyst should put more

weight into it.

Bad Economy:

A bad economy can hurt the investment banks’ business by decreasing

the number of potential customers.

Competition:

Competition in the investment banking is increasing day by day. New

players are foraying to the market due to this market share of each

existing company is getting affected and profits as well. Competitors are

numerous and difficult to combat, hence the investment banks should

always try to increase their share in the market.

Political Risk:

Politics can increase the investment banks’ risk factors, because

governments can quickly change business rules that negatively affect

the investment banks’ business.


Government Regulations:

Changes to government rules and regulations can negatively affect the

investment banks.

Substitute Products:

The availability of substitute products hurts the investment banks’ ability

to raise prices, because customers can easily switch to another product

or service.


POSSIBLE CONFLICTS OF INTEREST:- Potential conflicts of interest may arise between different parts of a bank,

creating the potential for financial movements that could be market

manipulation. Conflicts of interest may also arise between different parts

of a bank, creating the potential for market manipulation, according to

critics. Authorities that regulate investment banking (the SEC in the

United States, the SEBI in India) require that banks impose a Chinese

wall which prohibits communication between investment banking on one

side and research and equities on the other.

Many investment banks also own retail brokerages. Also during the

1990s, some retail brokerages sold consumers securities which did not

meet their stated risk profile. This behavior may have led to investment

banking business or even sales of surplus shares during a public

offering to keep public perception of the stock favorable.

Since investment banks engage heavily in trading for their own account,

there is always the temptation or possibility that they might engage in

some form of front running-the illegal practice whereby a broker

executes orders for their own account before filling orders previously

submitted by their customers, there benefiting from any changes in

prices induced by those orders.

Investment banking has also been criticized for its opacity. Investment

banking is often criticized for the enormous pay packages awarded

those who work in the industry.


WHAT TO LOOK FOR IN AN INVESTMENT BANK / AN INVESTMENT BANKER? The investment banker has a vested interest in making sure the

transaction closes, that the project is completed in an efficient time

frame, and with terms that provide maximum value to the client. At the

same time, the Client is able to focus on running the business, rather

than on the day-to-day details of the transaction, knowing that the

transaction is being handled by individuals with experience in executing

similar projects.

Investment banking is a service business, and the client should expect

top-notch service from the investment banking firm. Generally only large

client firms will get this type of service from the major Wall Street

investment banks; companies with less than about $100 million in

revenues are better served by smaller investment banks.

Some criteria to consider include:

Services Offered:

For all functions except sales and trading, the services should go well

beyond simply making introductions, or "brokering" a transaction. For

example, most projects will include detailed industry and financial

analysis, preparation of relevant documentation such as an offering

memorandum or presentation to the Board of Directors, assistance with

due diligence, negotiating the terms of the transaction, coordinating

legal, accounting, and other advisors, and generally assisting in all


phases of the project to ensure successful completion which is done by

the investment banker.

Experience:

It extremely important to make sure that experienced, senior members of

the investment banking firm will be active in the project on a day-to-day

basis. Depending on the type of transaction, it may be preferable to work

with an investment bank that has some background in your specific

industry segment. The investment bank should have a wide network of

relevant contacts, such as potential investors or companies that could be

approached for acquisition.

Record of Success:

Although no reputable investment bank will guarantee success, the firm

must have a demonstrated record of closing transactions.

Ability to Work Quickly:

Often, investment banking projects has very specific deadlines, for

example when bidding on a company that is for sale. The investment

bank must be willing and able to put the right people (the BEST

investment bankers) on the project and work diligently to meet critical

deadlines.


Fee Structure:

Generally, an investment bank and the investment banker as well, will

charge an initial retainer fee, which may be one-time or monthly, with the

majority of the fee contingent upon successful completion of the

transaction. It is important to utilize a fee structure that aligns the

investment bank's incentive with your own.

Ongoing Support:

Having worked on a transaction for your company, the investment bank

will be intimately familiar with your business. After the transaction, a

good investment bank should become a trusted business Advisor that

can be called upon informally for advice and support on an ongoing

basis.

Because investment banks are intermediaries, and generally not

providers of capital, some executives elect to execute transactions

without an investment bank in order to avoid the fees. However, an

experienced, quality investment banker’s service adds significant value

to a transaction and can pay for its fee many times over.


TOP 10 INVESTMENT BANKS:-

World's biggest banks are ranked for M&A advisory, syndicated loans,

equity capital markets and debt capital markets.

The ten largest global investment banks as of December 31, 2010, are

as follows (by total fees):

RANK COMPANY FEES ($M)

1. J.P. Morgan $5,533.85

2. Bank of America Merrill Lynch $4,581.59

3. Goldman Sachs $4,386.52

4. Morgan Stanley $4,055.48

5. Credit Suisse $3,379.12

6. Deutsche Bank $3,286.80

7. Citi $3,238.67

8. Barclays $2,864.44

9. UBS $2,614.44

10. BNP Paribas $1,433.89


CONCLUSION:-

Investment banking is a field of banking that aids companies in acquiring

funds. In addition to the acquisition of new funds, investment banking

also offers advice for a wide range of transactions a company might

engage in. Traditionally, banks either engaged in commercial banking or

investment banking. In commercial banking, the institution collects

deposits from clients and gives direct loans to businesses and

individuals.

Investment banking is a particular form of banking which finances capital

requirements of an enterprise. Investment banking assists as it performs

IPOs, private placement and bond offerings, acts as broker and carries

through mergers and acquisitions.

Historically, the investment banking industry has enjoyed unusually high

profits due to formidable barriers to entry. Factors such as technology,

deregulation, and improper behavior have eroded these barriers. The

industry now faces new entrants in the market which threatens the

profitability of incumbent firms. Significant strategic actions are required

in order for these existing firms to sustain their profitability.

The Investment Banking industry is come of age and is now growing by

leaps and bounds. Investment banking companies in India has joined

hands with global majors to adapt to global standards and also to

collaborate to work on cross border transactions and participate in

international offerings. Thus, investment banking can be quoted as –

“Investment Banking – the financial facilitator of market driven capitalism

and the economic catalyst of national and international development”


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BOOKS: Investment Banking – Concepts, Analyses and Cases

By Pratap. G. Subramanyam

CFM-McGraw-Hill Professional Series in Finance

Documents

Role of the Investment Bankers in the Financial System