论投资银行的发展及其价值

1、摘要：在2008年金融危机浪潮的影响下，最受打击的应该就是金融业，股票、证券、期货等分支行业都受到了不小的打击，同时投资银行业同样遇到了空前的困难。本文将通过对投资银行的历史、现状、发展的研究，以及投资银行的主要业务、演变、理论的研究，分析其中的利与弊，剖析现如今投资银行所面临的问题，及其问题形成的主要原因，为投资银行所体现出的问题找到行而有效的解决办法。投资银行如果想要金融危机的影响降到最小化就必须从根本上，从内向外的进行改革和转变。这样，投资银行将迎来一个发展的新春天。关键词：投资银行金融危机金融业Content1. The introduction of investment banks

2、11.1 Meaning11.2 Main business21.3 Development process31.3.1 Open up new business31.3.2 Development process31.3.3 Development modes42. The financial crisis in 2008 and the development of investment banks52.1 The impact of the investment banks to the financial crisis52.1.1 Lever52.1.2 The CDS contrac

3、t52.1.3 The CDS market52.1.4 Sub-prime52.1.5 Sub-prime crisis62.2 The impact of the financial crisis to the investment banks62.2.1 General situation of the loss62.2.2 Measures of the government72.2.3 The capital market72.2.4 The credit situation83. The challenges and development directions in the fu

4、ture of investment banks93.1 The change of bank mode93.2 The structural decline of leverage ratio93.3 The shift of business structure and profit model103.4 The increase of administrative intervention degree103.5 The reduce of monopoly103.6 The implemention of reform114. The warning to Chinas investm

5、ent banks from the crisis in the United States12Conclusion:13References:14Acknowledgements:15IUSST BA Graduation Paper1. The introduction of investment banksAffected by the financial crisis in 2008, many industries are faced with many risks and problems that need to be solved. After 4 years, both th

6、e recessive and dominant crisis occurs. With the influence of the wave of financial crisis in 2008, the financial industry is impacted greatly. The stock, security and future goods industries are affected severely by the financial crisis. And the investment bank industry encountered the unprecedente

7、d difficulties. The title of the paper is discussion about the development and value of the investment banks. Through the study of the principal business, evolution and theory of the investment banks, and the analysis of the advantages and disadvantages of the investment banks, we find the problem o

8、f the investment banks. Then we put the theory and the practice together to find out the right way to develop the business of the investment bank.We should take this crisis as a warning to re-examine the existing credit rating system, adjust the governance structure of financial institutions, re-exa

9、mine the use of financial products, such as innovation and the use of financial leverage. And then we should minimum the effect of financial crisis, make the global economic system more perfect and the economic situation more optimistic and stable. 1.1 MeaningThe so-called investment bank is only th

10、eoretical appellation. The investment bank in real life is not called investment bank, but called XXX company or “XXX securities company”, such as Merrill Lynch, Goldman Sachs, Morgan Stanley company from the United States, Rothschild, Schroder company from the United Kingdom and Nomura Securities,

11、Nikko Securities company from Japan. The reasons why investment bank is called bank, in theory, mainly are as follows: Firstly, the investment bank is an important part of the financial system. Secondly, the business of the investment banks and commercial banks is merged together in the history. Ess

12、entially, the investment bank is a financial intermediation, which is the bridge of investors and persons who are raising funds in the capital markets. Its main function is to help the person who is raising funds to raise funds and help the investors to invest funds with the most effective way. The

13、investment bank was born in Western Europe, developed in North America, and has become the most important and active financial institutions in Western financial markets. It plays an active role which can not be ignored in the world economy.1.2 Main businessThe business of traditional investment bank

14、s is mainly concentrated in the following three fields: the public issuing and underwriting of debt security and equity security, security broker and proprietary trading.The underwriting of securities mainly includes the issuance and underwriting of the stock and bond. It is one of the main sources

15、of monetary income of the investment bank. The investment bank has an obligation to maintain the market price of the securities after finishing underwriting the securities in the primary market, in order to ensure the liquidity and stability of price of this kind of securities. Then one of the impor

16、tant businesses of the investment bank in the secondary marketthe security broke business engendered. Securities brokerage business means that the investment bank, as the broker of the buyer and seller, buy or sell securities in the stock exchange in accordance with the commissioned instructions of

17、the investors. The greatest feature is that the investment banks do not need to spend its own funds. What they should do is to do transactions according to the investors instructions and get the service charge of a certain percentage of the transaction amount. However, as a trader, the investment ba

18、nk does proprietary trading deals. They accept the entrustment of the client and manage a large number of assets. At the same time, they hold a lot of securities. Therefore, when carrying on business, the investment bank not only has to bear the price risk, but also need to ensure the preservation a

19、nd appreciation of its assets. Here we mentioned another traditional business of investment bank, which is proprietary trading. Proprietary trading business is also an important business of investment bank in the secondary market. It refers to a business that the investment banks are directly involv

20、ed in securities trading activities with its own disposable funds or securities and bear the risk of security transactions. In addition, the financial industry develops fast with the rapid development of the economy. For this purpose, investment banks began actively looking for new business. Mergers

21、 and acquisitions of companies, management of funds, venture capital, securitization of assets, investment consulting and all are new business which breakthrough the traditional simple issuance and transactions of securities. And they have gradually become the main business of the modern investment

22、banks.Risen in the 1960s, the mergers and acquisitions of companies have become the core business of investment banks although is a new business. Mergers and acquisitions are acts of changes in property rights. The acts actually are that a company gets a certain degree of rights of controlling other

23、 companies through the transactions of property and rights, including asset ownership, operation and management rights and so on. As a comprehensive financial institution, investment bank is well informed and familiar with the business. Acting as an agent, the investment company can provide funds fo

24、r the mergers and acquisitions of enterprises. The fund industry is the fastest-growing financial industry at present. Investment bank can either work as the sponsor and administrator, or manage the funds after accepting entrust of the sponsor of the funds, or serve as the underwriter of issuance of

25、 funds. Venture capital, also known as entrepreneurship capital, is the emerging companies capital at the period of start-up and expansion of the companies. The specific characteristic is large risk and high income. Generally speaking, the emerging companies have a large market potential, but the ex

26、ploit, research and sales of new products imply a great uncertainty, which provide the business of investment banks with a broad market space.There are many other businesses in the investment banks. We dont do excessive statements here. However, they have a common characteristic, which is high risk.

27、 The financial crisis in 2008 revealed this characteristic.1.3 Development process 1.3.1 Open up new businessThroughout the evolution of the investment banks of western countries, we find that innovation is the basis of the survival and development of investment banks, and the necessities of competi

28、tion and avoiding risks among investment banks. The investment banks of western countries constantly open up new business, create new financial instruments and open up new service fields to meet the companies and investors needs compete with competitors. At the same time, modern information technolo

29、gy and financial globalization also provide a vast space for the innovation of investment business. At present, investment bank business has involved in many aspects, such as, issuance and trading of securities, mergers and acquisitions of companies, management of assets, management of risks, direct

30、 investment, project finance, financial advisors of companies and all. It also derives financial engineering which provides full range of services to the investors.1.3.2 Development processAmerican investment banks and commercial banks have a relatively clear division of business in the early years.

31、 However, in the 1920s, driven by the high profits of the investment banks, commercial banks took drastic measures to carry out the business in investment banks. The investment banks also raised funds to expand their own business. The situation of merging of the business of the two kinks of banks fo

32、rmed. The United States enacted the Glass Steagall Act after the great crisis from 1929 to 1933, which stipulated that the business of investment banks and commercial banks were completely separated. From then on, they began to operate in different ways. The commercial banks that operate investment

33、bank business indirectly were forced to separate from their investment bank institutions. The large financial institutions which operate investment bank business and commercial bank business were also forced to set up different investment bank and commercial bank. After World War II, many countries

34、follow the example of the U.S., which made investment bank and commercial bank separate in a wider range. However, in the past 20 years, with the development of information technology, innovation of financial business and deregulation of financial institutions, the business boundaries of both banks

35、became increasingly blurred. On one hand, the business of investment banks expanded rapidly and gradually entered the field of commercial banks starting from developing the edge business relative to the commercial bank business. On the other hand, commercial banks got involved in the business of inv

36、estment banks on basis of rich financial business experience, extensive business network and abundant financial strength facing an aggressive offensive by the investment bank. The international financial crisis in 1980s made that the overseas investment of commercial bank was converted to internatio

37、nal securities market from international syndicated loans. It intensified the momentum of developing investment banks of commercial banks. 1.3.3 Development modes As the representative of natural growth pattern, the development of investment banks in the United States and United Kingdom is mostly na

38、tural evolution. Their main development modes are through mergers and acquisitions, restructuring, appearing on the stock market and other market economy mode. The development mode of Japan is government guidance mode. Japanese securities companies development process deeply laid a mark of governmen

39、t guidance and support. In order to promote and protect the development of securities companies, the Japanese government takes a number of effective measurements, including slowing down the pace of opening the domestic stock market, implementing the liberalization of foreign securities investment an

40、d all. It nurtured the investment bank system led by Nomura, Nikko and Yamato.2. The financial crisis in 2008 and the development of investment banks 2.1 The impact of the investment banks to the financial crisisInvestment banks occupy an important position in the process of economic development in

41、the world. For example, the 2008 financial crisis, to a large extent, began from the products in investment banks. While the bankruptcy of Lehman shows the high risks of investment banks.The most common official interpretation of the financial crisis is the sub-prime problem. The sub-prime totally i

42、s hundreds of billions dollars, while the bailout funds from the American government has already reached more than a trillion, why is the crisis still no end? In this process, the investment banks packed new financial products, which is an unshakable reason of the financial crisis. 2.1.1 LeverMany i

43、nvestment banks use 20-30 times leveraged management in order to earn huge profits. For example, bank A borrows 90 billion dollars to invest with 3 billion dollars as collateral. If bank A gets a 5% profit, which means that bank A gets profit of 4.5 billion dollars. Compared with bank As assets, thi

44、s is a big profit of 150% of its own assets. In turn, if it loses 5%, which means that bank A will lose all its assets and owe 1.5 billion dollars.2.1.2 The CDS contractLever operation has a characteristic of high risks. The banks dont like to take such adventures operation. So they take the leverag

45、ed investment to do the “insurance”, which is called CDS. For example, the annual premium is 50 million dollars. For ten consecutive years, it is 500 million dollars. B will also think that its beneficial to itself. Then everyone is satisfactory with it. 2.1.3 The CDS marketAfter seeing the insuranc

46、e business controlled by B, C thinks that this is a lucrative business and buys 100 CDS contracts with 200 million dollars of each contract. In this way, CDS circulates in the financial market like stocks. It can be bought and sold.2.1.4 Sub-prime Fundamentally speaking, the profitability of the Com

47、pany A is mainly from the U.S. sub-prime loans. The sub-prime mostly is given to the U.S. real estate investors. These people see the prices go up, and then would like to do business about real estate to speculate. They mortgage their own house and loan to buy houses to do investment. Then, A, B, C,

48、 D, E, F will all earn money from invest real estate. 2.1.5 Sub-prime crisisTo a certain extent, the price of the house stops going up. At the time, the house of the real estate speculation people cant be sold. The high interest rate has to be paid. Then the real estate speculation people will give

49、the houses to the bank, which means that the breach occurs. Now the CDS insurance is in Gs hands. G just bought 100 CDS contracts with 30 billion dollars from F . He suddenly received the information with having no time to sell them. These CDS are downgraded, of which 20 people breached the contract

50、s, beyond the estimated default rates of 1%-2%. Plus 30 billion acquisition cost from CDS, G will lose a total amount of 130 billion dollars. Although G is one of the top ten institutions in America, it cant withstand such a huge loss. G will go bankrupt. Thats how the financial crisis spread.2.2 Th

51、e impact of the financial crisis to the investment banks2.2.1 General situation of the lossThe financial crisis caused by U.S. subprime mortgage crisis aroused powerful chain reaction in various industries in the globe, among which the investment banks were impacted first. The top 10 investment bank

52、s from the aspect of income and assets scale are Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman, Bear Stearns, JP Morgan Chase, Citigroup, UBS, Credit Suisse and Deutsche Bank, among which seven banks are from the U.S. . From March, 2008 on, the fifth-largest investment in America, Bear Stearn

53、s, accepted mergers and acquisitions from JP Morgan Chase because of its nearly bankruptcy. Then, the third-largest investment bank, Merrill Lynch, was acquisited by Bank of America with nearly 44 billion dollars. The fourth largest U.S. investment bank Lehman Brothers Holdings Inc. filed for bankru

54、ptcy protection because of failing in the process of acquisition negotiations. In half a year, three of the top ten investment banks, which are also the top five investment banks in the Wall Street collapsed. In the subprime mortgage crisis, the top ten investment banks can be divided into three lev

55、els according to different extent of the loss, which is slightly injured, seriously injured and critically injured. Except for Bear Stearns, Merrill Lynch and Lehman company, the Citigroup and UBS are also belong to the critical injured level. The two companies got into trouble of loss in annual rep

56、orts because of the reduction of the assets. The Citigroup is seriously impacted by the subprime mortgage. Its loss is as high as 55.1 billion dollars, followed by Merrill Lynch of 51.8 billion dollars. The third one is UBS, whose loss reached 44.2 billion dollars. Compared with the companies who lo

57、se in the critically level, Goldman Sachs and Morgan Stanley are much luckier. However, in September, Goldman Sachs and Morgan Stanley announced to be bank holding companies. And Buffett, Mitsui Sumitomo invested respectively 5 billion and 2.83 billion dollars to the Goldman Sachs. Morgan Stanley so

58、ld 20% stake to Mitsubishi UFJ Financial Group (MUFG) to conclude strategic alliance with Mitsubishi UFJ. All of them are to enhance the cash flow. On one hand, they want to pass through the crisis by holding enough cash. On the other hand, they want to reassure the investors and help them to regain

59、 confidence. Goldman Sachs lose up to 2 billion dollars in the fourth quarter of the year 2008, which was its first quarterly loss since its coming into the market in 1999. We can see that none of the investment banks are survived in the financial crisis in 2008. Compared with the slightly injured companies Goldman Sachs and Morgan Stanley, JP Morgan Chase, Deutsche Ba