In: Finance
1. What is the historical role of investment bankers ? Has this role changed ? Why or why not ?
2. Evaluate the industry performance of commercial banks and describe their future challenges.
Investmeent banking taken geneerally to mean the finnancing of
long-term capital neeeds, came into being with the merchants of
medieval trade routes. In almost all developed economies of the
world, even those develloping late in the 19th century, investment
bankers emerged from merchaant roots. The provision of investment
banking services has come from a variety of instiitutions over time
and across countries. Products and services have evolved to include
complex, often derivatiive, securities; and the legal regulation of
investment banking has often changed abruptly, particularly in the
last 100 years. Thus, even well-known investment banking names that
have endured over the centuries bear little reseemblance to their
ancestors. Yes there role have changed significantly as modern
market demands different outputs what history does. Now-a-days new
policies are introduced which are to be undertaken.
2.Commercial banks play an impportant role in the funding and
inancial borrowing. It has been 10 years passed of industry’s most
significant crisis and a great Depression.Understanding the basic
drivers of local bank's performance is critical to mitigate the
associated systemic risk and to consolidate its competitiveness.
Local banks have posted record profit figures over the last two
years, in spite of the prevalence of the global financial crisis.
However, there is insufficient documentation available enlightening
the relevant factors leading to such excellent performance. The
outcome of such survey would serve as a yardstick in predicting
future profitability of banks, determine factors contributing to
profitability, and also as a regulatory tool to strengthen
financial stability and to shield the domestic banking sector from
contagion of future banking crisis.
Future challenges which can be faced are defaults, low interest
rates as competiton is increasing, market moving towards efficient
market resulting into less margins.