Developed country’s Investment banks as role model

According to Glass-Steagall Act 1933 till 1999 (Gramm–Leach–Bliley Act) the USA maintained
a separation between investment bank and commercial banks. Investment banks are non-
depository institute. They are a lot of doubtless consulting institute for big non-public institutes.
Also, investment banks in USA have ability to perform proprietary mercantilism however
commercial banks are not entitled to this right. Top investment banks in USA are as follows- JP
Morgan Chase, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, Citigroup etc.

Advisor of Investment banks in USA must be regulated by U.S Securities & Exchange
Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation.

The investment banks provide a broad range of investment banking services to a diverse group of
corporations, financial institutions, investment funds and governments. Services embrace
strategic advisory assignments with regard to mergers and acquisitions, divestitures, company
defense activities, risk management, restructurings and spin-offs, and debt and equity
underwriting of public offerings and private placements, including domestic and cross border
transactions, as well as derivative transactions directly related to these activities.

Investment banking segment is composed of

Financial Advisory: all the strategic advisory compliments are given by them to any
corporation. Based on the underwriting they provide information to their clients and helps to take
investment decision. They allow different sectors of investments with different functions.

Underwriting: Includes public offerings and personal placements, together with domestic and
cross-border transactions, of a large vary of securities, loans and alternative money instruments,
and by-product transactions directly associated with these client underwriting activities.
Innovation and New Scope for Investment Bank in Bangladesh
We came to know that investment banks in the USA have rather wider varieties of functions.
More than forty-ninth of their voters’ square measure directly or indirectly concerned in the
market. This creates more scope for banks. Mortgage finance had a nice impact, before the
monetary meltdown in 2008. But it’s not stopped them to do business in real estate sectors.
Bangladeshi Investment banks will focus their workspace on property finance for socio-
economic class. This should be long term period financing. For instance, fifteen years to thirty
years loan policy for socio-economic class family. The fixed installation payment per month will
be lowered and the middle-class family can easily bear the amount. Such a system would create a
mortgage finance market. These sorts of mortgage finance agreement may be listed between
monetary establishments. But creator should hold bound % of the issued mortgage finance
agreement for securitization method.

Securities Research

Lots of brokerage corporations square measure already doing that in Bangladesh to draw in
investors available market. Securities include equities, bonds, and various other financial
instruments, and can be categorized by the security type or whether they are buy-side or sell-
side. Equity analysis is conducted by sell-side analysts at investment banks and freelance equity
analysis boutiques. Investors also perform buy-side research; however, this is often not published
and is inconsistent. Professional researchers specialize in specific industries and frequently
attend quarterly earnings conference calls. The sell-side analysis is obtainable as a part of a broad
set of economic services as well as broking and company finance. The sell-side analysis is
extremely big-ticket for retail investors to get. It is generally purchased by institutional investors
through Thomson Reuter’s subscription services or Bloomberg terminals. Consultancy service in
investment deciding isn't widely used nonetheless. This can be a major new innovation.

Proprietary Trading

This should be limited to certain types of banks. BSEC (Bangladesh Securities and Exchange
Commission) must closely monitor the activity of banks and guide them through Basel accords.
Commodity market commercialism is often a difficult job for banks. One of the most methods of
commercialism, historically related to banks, is arbitrage. In the most elementary sense, arbitrage
is outlined as taking advantage of a value discrepancy through the purchase or sale of bound
combos of securities to lock during a profit. Many people confuse arbitrage with what's basically
a standard investment. The distinction between arbitrage and a typical investment is that the
quantity of reward: the danger in what's referred to as arbitrage these days (to clarify it from
theoretical arbitrage, it doesn’t effectively exist) is market neutral. From the moment all legs of
an arbitrage trade are executed, a profit is locked in. The trade can stay subject to varied non-
market risks, such as settlement risk and other operational risks. Investment banks, that square
measure typically active in several markets around the world, perpetually anticipate arbitrage
opportunities.

Investment management

Institutions often control huge shareholdings. In most cases, they're acting as fiduciary agents
instead of principals (direct owners). The homeowners of shares on paper have a notion to
change the businesses via the pick rights the shares carry and also have the ability to pressure
management, and if necessary, out-vote them at annual and other meetings. The different quality
category definitions square measure wide debated, but four common divisions are stocks, bonds,
real estate and commodities. The exercise of allocating funds among these qualities (and among
individual securities at intervals every asset class) is what investment management corporations
square measure got. Asset categories exhibit totally different market dynamics and totally
different interaction effects; so, the allocation of money among asset classes will have a
significant effect on the performance of the fund. Some analysis suggests that allocation among
quality categories has additional prophetic power than the selection of individual holdings in the
crucial portfolio come back. Arguably, the ability of a triple-crown investment manager resides
in constructing the quality allocation, and separately the individual holdings, so as to outperform
certain benchmarks

Global Banking: Correspondent bank

Bangladeshi banks are heavily dependent on Barclays and other European banks. Establishing an
international branch in major business location will build a distinction in the Asian zone.
Correspondent banks square measure utilized by domestic banks so as to service transactions
originating in foreign countries and act as a domestic bank's agent abroad. This is done as a
result of the domestic bank might have restricted access to foreign monetary markets, and cannot
service its client accounts without opening up a branch in another country. Commonly,
correspondent accounts square measure the accounts of foreign banks that need the power to pay
and receive the domestic currency. The accounts enable them to pay others from the account or
receive cash from others into the account. This allows the bank to supply varied services to their
customers like an exchange and foreign currency denominated loans and deposits, despite them
not having a bank license for the foreign country in that country's currency.

Mergers and Acquisitions

There is no activity during this division for Bangladesh. A large company will acquire new or
tiny company so as to extend or add the worth to customers. A general term wants to ask the
consolidation of firms. A merger is a combination of two companies to form a new company,
while an acquisition is the purchase of one company by another in which no new company is
formed. Corporate acquisitions are often characterized for legal functions as either "asset
purchases" within which the vendor sells business assets to the customer, or "equity purchases"
in which the buyer purchases equity interests during a company from one or additional
commercialism shareholders. Asset purchases square measure common in technology
transactions wherever the customer is most curious about specific belongings rights, however,
doesn't need to amass liabilities or different written agreement relationships.