+ to atonal sense, the ole of nvestment banking is one intermediation in resource allocation. 1 performs invermediation primarily by facitiwing floatation (ssuance) oF securities (shares, bonds, debentures, ‘ommerial paper et) on behalf of suse. is an investment bank needed as Why can’t issuing firms sell ‘securities directly to the investors? Ans. Pcs» compbined proces mquing yee lls valtion lea! kzoictoe cc Aconpany mt Hira iors ae fs ad lepanl nv, Paks onde “edges” onthe sung INVESTMENT BANKING: Definitionrinvesie cant + Original ad ‘arundel (isa Investment Banking Commercial Banking etn the USA, the Banking Act of 1933 (Giase-Steagall Act) prohibited commercial het 0 perf Investment banking resin the commercial banks {hom undertaking risky activities that nal ma ‘against the interest of depositors, ooInvestment Banking vs. ‘Commercial Banking = However, because of the advancement of isk management, the prohibitions om Commercial banks regarding securities underwriting had been relaxed. They were allowed to underwrite municipal general obligation bonds, industrial bonds and some corporate issues Tnvestment Banking vS- ‘Commercial Banking, «Nowra, btn venga banks an SOO Sg ine fe a recom AS Bercy cried Jose «Those sone nce sans a aan oS Pores nee Sead me rach Siecnen Gees e ste eiferencetetgen ommersial SY + TOS STS cm nah eo over ea Investment Banking vs. Commercial Banking ‘* In Bangladesh, commercial banks can perform the funetions of investment banks through their subsidiaries. # ic UCB capital is a subsidiary of UCB, BRAC EPL investments is a subsidiary of BRAC bank et. Investment Banking Industry | cys oigonolisiccompeion NES | tae ms dose iy 7) ‘The investment banks can be classified based on: ) Si | ) Range of services offeredjnvestor ba a ap poatgues also called specially shops) 2 Heat ge njust afew services. Investment Banking vs. Financial Engineering Financial engineering is the lifeblood of financial innovation and a cornerstone of ‘moder investment banking, Finance hasbeen transformed from descriptive discipline to an analytical one,Investment Banking vs- Financial Engineering mcering canbe defined asthe development tnd the creative application of financial technology 10 seive financial probiems, exploit financial opportunities land 0 otherwise add value Derivative products, MBO, CBO, Swaps are all examples of “financial engineering. Simpler example includes Islamic ‘banking products, floating rate bonds etc.