Introduction to Investment Banks
The roots of investment banks are varied. Some are bankers or merchants who started guaranteeing other merchants' bills, others are outgrown brokerages, but most are products of the Glass-Steagall Act. Originally, the term "investment bank" comes from the United States of America, while some other variations include merchant bank' in the United Kingdom and securities house' in Japan. With the globalization of US investment banking, the term has become a generic concept, nonetheless, while in the USA merchant bank has come to mean a bank which risks its own capital in bridge loans and position taking. Small, limited-function investment banks are called boutiques'. They thrive on relationships and the quality of work rather than committing their own capital, and necessarily lose the attached income.
From today's perspective, the Glass-Steagall Act may appear a deplorable market imperfection. For the investment banks, it was a godsend......
Join Now or Login to view the rest of this paper.
Approximate Word Count: 2922
Approximate Pages: 12 (260 words per double-spaced page) |