The Business of Investment Banking: A Comprehensive Overview

The Business of Investment Banking: A Comprehensive Overview

The Business of Investment Banking: A Comprehensive Overview

The Business of Investment Banking: A Comprehensive Overview

Synopsis

A comprehensive overview of investment banking for professionals and students

The investment banking industry has changed dramatically since the 2008 financial crisis. Three of the top five investment banks in the United States have disappeared, while Goldman Sachs and Morgan Stanley have converted to commercial banking charters. This Third Edition of The Business of Investment Banking explains the changes and discusses new opportunities for students and professionals seeking to advance their careers in this intensely competitive field.

The recent financial regulation overhaul, including the Dodd-Frank legislation, is changing what investment banks do and how they do it, while the Volcker rule has shaken up trading desks everywhere.

  • This new edition updates investment banking industry shifts in practices, trends, regulations, and statistics
  • Includes new chapters on investment banking in BRIC countries, as Brazil, Russia, India, and China now account for a quarter of the global economy
  • Explains the shift in the listing of securities away from New York to various financial centers around the world, and how major exchanges compete for the same business

This new edition, reflecting the current state of the investment banking industry, arrives in time to better serve professionals wanting to advance their careers and students just beginning theirs.

Excerpt

The investment banking market has experienced dramatic changes since 2008. Three of the top five investment banks in the United States have disappeared, while Goldman Sachs and Morgan Stanley have converted to commercial banking charter. The bankruptcy of Lehman Brothers has also brought about unprecedented quantitative easing in monetary policies in many countries. Recent financial regulation overhaul will have significant impact on what investment banks do and how they operate those activities. The Volcker rule will shake up trading desks. Investment banks such as Goldman Sachs, Morgan Stanley, JPMorgan, Deutsche Bank, and Credit Suisse have reshuffled proprietary trading. Therefore, the investment banking market is very different today.

THE NEW INVESTMENT BANKING

One important lesson from the financial crisis is the need for more effective regulation. The recent financial reform legislation, most notably the DoddFrank bill, aims at setting standards for financial operations and preventing another crisis. The reforms focus on several essential areas. The first is to end β€œtoo big to fail.” Taxpayers should not be protecting the shareholders and bondholders of even the most systemically important financial firms. Instead, these firms should be required to structure themselves so that they can be recapitalized without taxpayer money, and before local problems can spiral into a systemic crisis. Second, financial firms are required to practice consistency. Regulators should require that all assets across financial institutions be similarly . . .

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