Banking Theory And Practice

HS4L001

INVESTMENT BANKS
Presented by:
Puspendu Das (17ME01043)
Advait Deshmukh (17ME02001)
Sandeep Kumar (17CE01026)
What
Whatisare
Investment
Investment
Banking?Banks?
Clients of Investment
Banks

Corporates

Funds

Sovereigns

High net worth individuals

Bank Itself
The Great Depression

Economic boom in 1924 in US

Banks granted loans without collateral
provided it be used to purchase shares
Considered as safe investment
Summer 1929, General Motors director said,
“If you invest $15 now, you will earn $80000
in 20 years”
Heavy investment occured
Market crashed
Investors bankrupt, so they couldn’t repay
loans
People started withdrawing money from banks
Bank could not repay deposits
People lost faith in banks
Reforms

Franklin.D.Roosevelt Became president in 1932

Interventionist program called the New Deal
was established
It includes series of bank reforms that aimed at
preventing such market crash
Glass-Steagall law enacted which called for
complete separation of deposit banking and
investment banking
Roosevelt’s main aim was to regain confidence
of people in banking system to facilitate credit
flow
How do Investment
banks make money?
1. Mergers and
Acquisitions
2.Helping
companies raise
funds
3. Proprietary
Trading
4. Prime
Brokerage
5. Private
Wealth
Management
6. Structuring
Products
1. History
Association
Investment
options
Investment
environment
Conclusion:
The growth of indian economy is directly
driven by the Activities and performance of
investment banks.
Their role in India and global market cannot
be overemphasized.