INTRODUCTION

Investment banks create securities, including stocks and bonds, for themselves and other
companies, and facilitate the trade in them. They also help companies manage mergers and
acquisitions. The primary role of investment banking in the economy has traditionally been to help
businesses raise capital for their operations by selling investment securities to the general public. At
a very macro level, ‘Investment Banking’ as the term suggests, is concerned with the primary
function of assisting the capital market in its function of capital intermediation, i.e. the movement
of financial resources from those who have them (the Investors), to those who need to make use of
them for generating GDP (the Issuers). As we know, banking & financial institutions on the one
hand and capital market on the other are the two broad platforms of institutional intermediation
for capital flows in the economy. Therefore, it could be inferred that investment banks are those
institutions that are the counterparts of banks in the capital market in the function of
intermediation in resource allocation. Nevertheless, it would be unfair to conclude so, as that
would confine investment banking to a very narrow sphere of its activities in the modern world of
high finance. Over the decades, backed by evolution and also fuelled by recent technological
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 bankers have also enjoyed celebrity status, but at times, they have paid the price for
excessive flamboyance as well.

To continue from the above, in words of John F. Marshall and M.E. Ellis, ‘investment banking is
what investment banks do.’ This definition can be explained in the context of how investment
banks have evolved in their functionality and how history and regulatory intervention have shaped
such an evolution. Much of investment banking in its present form thus owes its origins to the
financial markets in USA, due to which, American investment banks have been leaders in the
American and Euro markets as well. Therefore, the term ‘investment banking’ can arguably be said
to be of American origin. Their counterparts in UK were termed as ‘merchant banks’ since they had
confined themselves to capital market intermediation until the US investment banks entered the
UK and European markets and extended the scope of such businesses.

Investment Banking is a system under which banks arrange long-term funds for business and
industry. They work both as financiers as well as underwriters. As financiers they themselves
provide long-term funds to business and industry. As underwriters they work as middlemen
between Business Corporation and investors. They undertake the responsibility of selling shares or
debentures of the corporation to the general public for commission. In the absence of failure of the
public to subscribe in full, they take the unsubscribed portion of the shares or debentures
underwritten by them.

The Investment Banking in India proved important agencies for mobilizing savings of small masses
in rural as well as urban areas. With a view to make a proper assessment of the investment banks
operating in India, a detailed study is necessary of leading investment banks engaged in
mobilization of saving and investment.
The increasing sophistication and deepening of the financial markets on one hand, and fast
transforming corporate landscape from a protective background to a globalised market place on
the other, would lead to more complex corporate transactions, and therefore the role of
investment bankers as transaction experts and advisers would become dispensable.

MEANING OF INVESTMENT BANKING

Investment banks, informally I-banks, 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. They also act as intermediaries in
trading for clients. 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
structures have blurred, especially as commercial banks have offered more investment banking
services... Investment banks may also differ from brokerages, which in general assist in the
purchase and sale of stocks, bonds, and mutual funds. However some firms operate as both
brokerages and investment banks; this includes some of the best known financial services firms in
the world. There appears to be considerable confusion today about what does and does not
constitute an "investment bank" and "investment banker". In the strictest definition, investment
banking is the raising of funds; both in debt and equity, and the name of the division handling this
in an investment bank is often called the "Investment Banking Division" (IBD). However, only a few
small boutique firms solely provide this - such as Greenhill, with almost all investment banks heavily
involved in providing additional financial services for clients such as the trading of fixed income,
foreign exchange, commodity and equity securities. It is therefore acceptable to refer to both the
"Investment Banking Division" and other 'front office' divisions such as "Fixed Income" as part of
“investment banking" and any employee involved in either side an "investment banker". More
commonly used today to characterize what was traditionally termed "investment banking" is “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.). 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. Some firms have both buy
and sell side components.

ROLE OF THE INVESTMENT BANK

Investment banks provide four primary types of services: raising capital, advising in mergers
and acquisitions, executing securities sales and trading, and performing general advisory services.
Smaller investment banks may specialize in two or three of these categories.

Raising Capital:-
An investment bank can assist a firm in raising funds to achieve a variety of objectives, such
as to acquire another company, reduce its debt load, expand existing operations, or for specific
project financing. Capital can include some combination of debt, common equity, preferred equity,
and hybrid securities such as convertible debt or debt with warrants. Although many people
associate raising capital with public stock offerings, a great deal of capital is actually raised through
private placements with institutions, specialized investment funds, and private individuals. The
investment bank will work with the client to structure the transaction to meet specific objectives
while being attractive to investors.

Mergers and Acquisitions:-

Investment banks often represent firms in mergers, acquisitions, and divestitures. Example
projects include the acquisition of a specific firm, the sale of a company or a subsidiary of the
company, and assistance in identifying, structuring, and executing a merger or joint venture. In
each case, the investment bank should provide a thorough analysis of the entity bought or sold, as
well as a valuation range and recommended structure.

Sales and Trading:-

These services are primarily relevant only to publicly traded firms, or firms which plan to go
public in the near future. Specific functions include making a market in a stock, placing new
offerings, and publishing research reports.

General Advisory Services:-

Advisory services include assignments such as strategic planning, business valuations,

assisting in financial restructurings, and providing an opinion as to the fairness of a proposed
transaction.
 FUNCTIONS OF INVESTMENT BANKING

Investment banks in countries like Australia, the UK or US typically have corporate finance,
capital markets, trading, institutional equity and fixed income, private clients advisory, derivatives,
compliance and research departments as well as other major functions like project finance,
structured finance, investment management and mergers and acquisitions.
Increasingly, investment banking is migrating in two distinctly different directions: one, the
tendency for global banking entities to merge and grow larger to reap the global scale economies
created by falling capital controls; and two, the emergence of small niche industry, technology or
regional entities that fulfill specialist tasks.
For major investment banks the key areas are corporate finance which involves designing
financing proposals such as IPO’s or structured financings; institutional equity departments which
market the proposals or IPO’s (sometimes called primary offerings); and research which provide the
detailed analysis and information on companies for corporate finance and institutional equity to
market to their respective clients: the companies supplying equity and the institutions demanding
equity.
For smaller specialist players it is increasingly the provision of specialist quantitative,
technology or customized knowledge capital that is key. Those investment banks that also run
investment management businesses and stock broking businesses have to be careful to maintain
strict “firewalls” with their corporate finance arms to ensure that price sensitive information does
not reach these parts of the business before it is announced to the market as a whole. In practice,
this requires investment banking managements to require keen compliance to ethical and
regulatory codes of conduct to avoid conflicts of interest, a source of constant challenge to the
industry.

Investment bankers perform the following four basic economic functions:

1) Arrange the provision of capital for corporations and governments by underwriting and
distributing new issues of securities
2) Maintain markets in securities by trading and executing orders in secondary market
transactions
3) Provide advice on the issuance, purchase, and sale of securities, and on other financial
matters.
4) Create and manage collective investment vehicles

In contrast to commercial banks, whose chief functions are to accept deposits and grant
short-term loans to businesses and consumers, investment bankers engage primarily in
long-term financing.

They also solicit new untapped funds from large institutions and wealthy individuals
on a case by case basis to finance transactions they arrange, instead of drawing on the
existing pool of funds from commercial banks.
Underwriting:-
 When a company needs financing to expand or undertake new projects in many
countries today, an investment bank will step in to offer advice on possible methods and
sources of funding.

Sometimes the investment bank will offer to buy the entire issue and resell the
securities in smaller amounts to investors, a procedure known as 'firm commitment'
underwriting. At other times the investment bank will offer to act on a "best efforts"
basis for commission only, or sometimes in a mixture of the two.

The method chosen will depend on the nature of the firm and industry, the reason
for the financing, the size of the issue and the state of capital market supply and
demand. Often before deciding on the mechanism the investment bank will work
alongside other financial advisers, such as accountants and lawyers, to analyses the
issuers’ circumstances and strategy in order to design the optimal financing mix to fit
this strategy.

Interaction with Institutions:-

The investors to whom these issues are marketed include individuals,
insurance companies, pension funds, trust companies, investment companies, and other
financial institutions. Investment banks are therefore careful to work closely with
financial institutions to gauge the level of their demand and interest for current or other
issues.
At other times an investment bank may offer to help a corporate issuer sell an entire
issue of securities directly to one or more institutional buyers, such as insurance
companies, without registering the issue for public sale. These sales are known as
private placements.

Syndication:-
Large issues are usually underwritten by syndicates or groups of firms in
order to share the risk. The “originating” investment bank that proposes and
designs the financing mix is usually named as the lead manager of the issue.
The lead manager conducts a thorough investigation of the issuing
corporation, analyzing financial, marketing, and production matters involved in
the proposed transaction. It then enlists the participation of other houses in a
syndicate; each syndicate member agrees to take a specified part of the issue.

MAIN ACTIVITIES AND UNITS OF INVESTMENT BANK

Large, global investment banks typically have several business units, including
Investment Banking, concerned with advising public and private corporations;
Research, concerned with producing reports on valuations of financial products; and
 Sales and Trading, concerned with buying and selling products both on behalf of the
bank’s clients and also for the bank itself. Banks undertake risk through Proprietary
Trading, done 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.

An investment bank is split into the so-called Front Office, Middle Office and Back
Office. The individual activities are described below:

FRONT OFFICE:-

 Investment Banking is the traditional aspect of investment banks which

involves helping customers raise funds in the Capital Markets and advising on
mergers and acquisitions. Investment bankers prepare idea pitches that they
bring to meetings with their clients, with the expectation that their effort will
be rewarded with a mandate when the client is ready to undertake a
transaction. Once mandated, an investment bank is responsible for 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. Other terms for the Investment Banking Division include Mergers
& Acquisitions (M&A) and Corporate Finance.

 Financial Markets is split into four key divisions: Sales, Trading,

Research and Structuring.
Sales and Trading is often the most profitable area of an investment
bank, responsible for the majority of revenue of most investment
banks. In the process of market making, traders will buy and sell
financial products with the goal of making an incremental amount of
money on each trade. Sales is the term for the investment banks sales
force, whose primary job is to call on institutional and high-net-worth
 investors to suggest trading ideas 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.
 Research, is the division which reviews companies and writes reports
about their prospects, often with "buy" or "sell" ratings. While the
research division generates no revenue, its resources are used to
assist traders in trading, the sales force in suggesting ideas to
customers, and investment bankers by covering their clients. In recent
years the relationship between investment banking and research has
become highly regulated, reducing its importance to the investment
bank.
 Structuring has been a relatively recent division 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.
MIDDLE OFFICE:-

 Risk Management involves analyzing the 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.

BACK OFFICE:-

 Operations involve data-checking trades that have been conducted, ensuring

that they are not erroneous, and transacting the required transfers. Whilst it
provides the greatest job security of divisions within an investment bank, it is
widely known to involve the most monotonous work at relatively low pay.

 Technology - Every major investment bank has considerable amounts of

inhouse software, created by the Technology team, who are also responsible
for Computer and Telecommunications.

RISK IN INVESTMENT BANKING

Risk is defined as the volatility or standard deviation (the square root of the variance)
of net cash flows of the firm, or, if the company is very large, a unit within it. In a profit –
maximizing bank, a unit could be a whole bank, a branch, or, a division. The risk may also
be measured in terms of different financial products. But the objective of the investment
bank as a whole will be to add value to the bank’s equity by maximizing the risk –
adjusted return to shareholders. In this sense, a bank is like any other business, but for
 banks, profit ability (and shareholder value added) is going to depend on the
management of risks. In the extreme, inadequate risk management may threaten the
solvency of bank, where insolvency is defined as a negative net worth, that is, and
liabilities in excess of assets.

 Credit Risk:- Credit risk is the risk that an asset or a loan becomes
irrecoverable in the case of outright default, or the risk of delay in the
servicing of the loan. In either case, the present value of the asset declines,
thereby undermining the solvency of a bank. If the agreement is a financial
contract between two parties, counterparty risk is the risk that the
counterparty reneges on the terms of the contract. The term counterparty
risk is normally used in the context of traded financial instruments, whereas
credit risk refers to the probability of default on a loan agreement.

 Liquidity and Funding Risk:- This is the risk of insufficient liquidity for normal
operating requirements, that is, the ability of the bank to meet its liabilities
when they fall due. The problem arises because of a shortage of liquid assets
or because the bank is unable to raise cash on the retail or wholesale
markets. Funding risk is the risk that a bank is unable to fund its dayto-day
operations.

Liquidity is an important service offered by investment bank. Customers place their

deposits with a bank, confident they can withdraw the deposit when they wish. If the
ability of the bank to pay out on demand is questioned, all its business may be lost
overnight. Since the bank can do nothing to reduce its overhead costs during such a
short period, it will incur losses and could become insolvent.

Maturity matching will guarantee liquidity and eliminate funding risk because all
deposits are invested in assets of identical maturities: then every deposit can be met
from the cash inflow of maturing assets. But such a policy will never be adopted because
intermediation in the form of asset transformation is a key source of bank profit.

Interest Rate Risk:-

Interest rate risk arises from interest rate mismatches in both the volume and maturity of interest –
sensitive assets, liabilities, and off-balance sheet items. An unanticipated movement in interest
rates can seriously affect the profitability of the bank, and therefore, shareholder value added. The
traditional focus of an asset liability management group within a bank is the management of
interest rate risk.

Bank can lend at either fixed or variable rates, here the variable rate is linked to
some central base or bank rate. Banks will always have some interest mismatch, such as
a mismatch between fixed and variable rate assets and liabilities. If they have excess
fixed rate liabilities, they are vulnerable to failing rates. Banks may be either asset
sensitive, meaning their interest sensitive assets reprise faster than their interest
sensitive liabilities, or liability sensitive, where the opposite is the case. Typically, the
former is the norm, meaning a fall in interest rates will reduce net interest income by
increasing the bank’s cost of funds relative to its yield on assets. If a bank is liability
sensitive, a rise in rates will reduce net income.

 Market or Price Risk:-

Banks incur market (or price) risk on instruments traded in well – defined markets.
The value of any instrument will be a function of price, coupon, coupon frequency, time,
interest rate, and other factors. If a bank is holding instruments on account (for
example, equities, bonds), then it is exposed to price or market risk, the risk that the
price of the instrument will be volatile. General or systematic market risk is caused by a
movement in the prices of all market instruments because of, for example, a change in
economic policy. Unsystematic or specific market risk arises in situations where the price
of one instrument moves out of line with other similar instruments, because of an event
(or event) related to the issuer of the instrument. Thus the announcement of an
unexpectedly large government fiscal deficit might cause a drop in a general share price
index, while the announcement of an environmental law suit against a firm will reduce
its share price, but is unlikely to cause a general decline in the index.

A bank can be exposed to market risk (general or specific) in relation to debt

securities (fixed and floating rate debt instruments, such as bonds) debt derivatives
(forward rate agreements, futures and options on debt instruments, interest rate and
cross country swaps, and forward foreign exchange positions) equities, equity
derivatives (equity swaps, futures and options on equity indices, options on futures,
warrants), and currency transactions.

 Foreign Exchange or Currency Risk:-

Under flexible exchange rates, any net short or long open position in a given
currency will expose the bank to foreign exchange risk, a special type of market risk. A
bank with global operations experiences multiple currency exposures. The currency risk
arises from adverse exchange rate fluctuations, which affect the bank’s foreign exchange
positions taken on its account, or on behalf of its customers. Banks engage in spot,
forward and swap dealing. These banks have large positions that change dramatically
every minute. Mismatch currency and by maturity is an essential feature of the business
– successful mismatch judgments may reflect successful risk management.

 Sovereign and Political Risks:-

Sovereign risk normally refers to the risk that a government will default on debt
owed to a private bank. In this sense, it is a special form of credit risk, but the bank may
not have the usual tools for recovering the debt at its disposal. For example, if a private
debtor defaults, the bank will normally take possession of assets pledged as collateral.
But if the defaulter is a sovereign government, the bank is unlikely to able to recover the
debt by taking over some of the country’s assets.
 Political risk is the risk of political interference in the operations of a private sector
bank. It can range from banks being subjected to interest rate or exchange control
regulations, to nationalization of a bank. For example, since the Second World War,
France has vacillated between nationalization and privatization of its banking sector. All
businesses are exposed to political risk but banks are particularly vulnerable because of
their critical position in the financial system.

 Risk of Global Banking:-

Global diversification of assets often allows a bank to improve upon its risk
management, thereby raising profitability and shareholder value added. However,
global exposure makes the business of risk management more complex, for a
number of reasons. First, banks with branches or subsidiaries in other countries have
part of their infrastructure exposed to currency, exchange control, and political risk.
Second, evaluating credit risks in foreign countries requires additional research and
intelligence. Third, the interbank and Euromarkets are vulnerable to any unexpected
financial shocks arising from key players in these markets, such as Japan or the USA.
Fourth, sovereign risk may be a greater threat in the institutional arena, if political
default in foreign countries is more common than in the home country. Finally, fraud
or financial mismanagement is harder to defect in international operations, thereby
increasing operating risk.
TYPES OF INVESTMENT BANKING
When you talk about investment and investment banking, the first thing that would come to
your mind is business management and finance. An investment is something that you place
in a bank or venture in the hopes of either saving the money or letting it grow. It is usually
for the latter reason that individuals and organizations transact investments. To understand
investment banking, first, we have to understand its roots. The term "invest" comes from
the term "vests," which is Latin for "garment" and was used to denote the act of putting
resources into another one's pockets. Like the Latin term, the investor puts the assets into
another entity's pocket; the latter is where the investment banks come in.
Basically, investment banking involves the client purchasing assets from the investment
bank. The client expects that the purchased asset capital will gain dividends and grow. In
effect, the investor did not work on anything other than making the initial purchase.
Generally, a bank is a financial institution. It is usually concerned with being the middle
entity from which the client can transact business. The client places the money in the
different forms of banking services and gains some interest out of this input. The bank, in
turn, invests the client's money into business ventures or allows the clients to borrow
money for interest in order to grow the initial cash investment. On the other hand,
investment banking is a specific type of banking, which are transactions related and limited
to the financial market. This type of banking is concerned with investments as a whole.

Investment banks come in two types:-

 STOCKS & BONDS:-

The basic investment bank issues stocks and bonds to the clients for a prespecified amount.
The bank then invests the money that the client used to purchase the stocks and bonds.
These investments differ among banks. In countries where it is allowed to do so, investment
banks have their networks of financial and lending

institutions from which they profit. Others also invest in property development and
construction. The client with the stocks and bonds would then receive payments from the
profits made on his money on a specified period of time. It can be justified that both the
client and the investment bank profited from the client's initial investment. Because these
banks know the ins and outs of their trade, it is not unusual that small or large business
ventures and corporations seek their help on matters regarding mergers, acquisitions, and
other corporate activities.

 MERCHANT BANKS:-
The second type of investment banks is the merchant bank. These banks are involved in
trade financing and providing capital to business ventures not in terms of loans but of
shares. Because these investment banks are based on security of the shares, they finance
only those ventures that have made their mark in the business world. New merchant
companies are usually not financed.
However, versatility is necessary in business. Therefore, a lot of banks have evolved to
encompass all aspects of banking to cater to the needs of a wide range of customers. These
banks offer savings deposits and loans services to regular customers and, at the same time,
offer investments to the financially advanced ones.
HOW INVESTMENT BANKING OPERATION DIFFER FROM OTHER BANKS

Unlike commercial banks and savings and loans, investment banks do not
seek cash deposits from customers in the form of checking and savings
accounts, and they do not make traditional interest-bearing loans to
individual customers. Investment banks instead make their money
primarily
 By advising corporate clients on the creation of stocks,
bonds and other securities
 By underwriting securities
 By facilitating mergers and acquisitions, along with any due
diligence and securities exchanges that may go along with
them.
 And by brokering (or selling) securities to investors.
Investment bankers have also created a broad array of
investment options to go along with traditional stocks and
bonds, including securities derivatives such as call and put
options, which allow investors to lock in a buy or sell price
on an investment at a future date, and credit default swaps,
which insure bond buyers against the risk that a bond seller
will renege on the debt.

Investment banks also lend stocks to facilitate short trades, in which

speculators borrow stock and sell it in hopes that its price will decline
before they re buy it and return it to the lender.

CHANGES IN INVESTMENT BANKING

In 1933, Congress passed the Glass-Steagall Act, which separated key
investment banking functions from commercial banks. In the midst of the
Great Depression, lawmakers feared that combined investment and
commercial banking institutions would be tempted to use money in
commercial banking deposits, such as checking accounts, to bail out unwise
bets on the investment banking side if the two remained combined.

Glass-Steagall was effectively repealed in 1999 and, although commercial

banks and investment banks were once again given the leeway to combine
under one roof, pure investment banks enjoyed greater relief from
government regulations. In one notable case, the federal Securities and
Exchange Commission raised the debt limit for investment banks in 2004,
which allowed Wall Street’s largest pure investment banks, such as Merrill
Lynch, Lehman Brothers, Bear Stearns and Goldman Sachs, to invest more
freely with borrowed money – an option largely denied to commercial
banks, who were forced to maintain higher levels of cash and securities
reserves to back up their loans and investments.

when a widespread financial crisis forced all of the largest surviving Wall
Street firms to convert themselves into bank holding companies in order to
gain eligibility for federal aid. The move transferred the firms from the
investment-oriented regulatory oversight of the Securities and Exchange
Commission to the commercial bankingoriented regulation of the Federal
Reserve, with consequences that are still unclear.

INVESTMENT BANKING CONFERENC

With times being hard these days, investment banking is a good way to
invest money and still feel secure. In this type of banking, an individual or a
company or the government seeks the assistance and guidance of an
investment bank to buy or sell securities. It is the investment banks that
address concerns on mergers of companies or acquisition of new
properties. They are also the experts in providing comprehensive advice to
clients to manage their capital and investments. They also help in risk
management and assessment.
 To be able to serve their clients well, periodically, investment banking
conferences are held to keep the clients up-to-date with what measures the
banks are doing to protect the investments and at the same time how these
investments are faring in the everchanging world of business and finance.
These conferences are also designed to build a holistic relationship between
the clients and the banks to be able to identify the needs and the
responsibilities of the clients as well as the corresponding responsibilities of
the banks.

These investment banking conferences are also done to provide a way

for various investment banks to help one another and share their expertise
in different fields to help augment the status of this type of banking and, at
the same time, find timely solutions to current problems targeting the
banking community.

The whole world is experiencing an alarming economic crisis. Because

this global crisis interconnects, various finance institutions are at a great
risk. Therefore, the investment banking conference aims to address
common issues such as credit markets affecting the economy, corporate
environments being affected by constant changes, and investment banks
that need to be kept abreast with the fast events.

For an investment banking conference to be effective, it has to accept

the fact that banks could not stand by themselves. Therefore, client issues
should be addressed, and experts on various industrial fields should be
allowed to share the practical knowledge that they have learned. Also, the
usefulness and timeliness of academic research being done by renowned
business researchers should not be overlooked. Current issues will help
understand and solve current problems, and current trends will be useful to
predict the future of the financial world.

A good investment banking conference will allow all concerned sectors

to interact with one another and provide inputs to benefit all. The
professional inputs of industry experts along with the intellectual inputs
from the academic researchers can solve a lot of issues that may have been
difficult for just one team to solve.
 Because important decision-making issues will be discussed, investment
banking conferences usually cater to CEOs and other top executives. The
presenters from various fields of industrial or academic expertise are also
renowned in their own right and at par with the CEOs in attendance. These
conferences therefore strengthen the networks that the financial market
holds over global issues and events.

During this difficult time of world crisis and poverty, the general banking
clients can still sit peacefully and trust that the investment banks will do
their best in finding solutions to solve current issues.

GLOBAL INDUSTRY STRUCTURE

The investment banking industry on a global scale is oligopolistic in nature

ranging from the global lenders (known as ‘Global Bulge Group’) to ‘Pure’
investment banks and ‘Boutique’ investment banks. The bulge group
consisting of eight investment banks has a global presence and these firms
dominate the league tables in key business segments. The top ten global
firms in terms of their fee billings as in following table:-

Banks % Of Total
Merrill Lynch 9.0
Goldman Sachs 7.5
Credit Suisse First Boston 7.2
Salomon Smith Barney (Citigroup) 6.7
Morgan Stanley 6.3
J. P. Morgan 5.5
UBS Warburg 4.6
Lehman Brothers 3.6
Deutsche Bank 3.5
Bank of America 2.4