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This Is The Division That Brings in Revenue

Bulge bracket investment banks engage in a wide range of activities including underwriting, mergers and acquisitions, trading, investment management, and research. Some bulge bracket banks are part of larger financial holding companies, such as JPMorgan. Boutique investment banks focus on particular market segments and are not part of a larger institution. A financial holding company is a institution that offers banking and other financial services, such as insurance and securities investment. Financial holding companies were created by the 1999 Gramm-Leach-Bliley Act. The front office of an investment bank brings in revenue by helping clients buy and sell securities. The middle office manages risks through activities like risk analysis and treasury management. The back

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39 views2 pages

This Is The Division That Brings in Revenue

Bulge bracket investment banks engage in a wide range of activities including underwriting, mergers and acquisitions, trading, investment management, and research. Some bulge bracket banks are part of larger financial holding companies, such as JPMorgan. Boutique investment banks focus on particular market segments and are not part of a larger institution. A financial holding company is a institution that offers banking and other financial services, such as insurance and securities investment. Financial holding companies were created by the 1999 Gramm-Leach-Bliley Act. The front office of an investment bank brings in revenue by helping clients buy and sell securities. The middle office manages risks through activities like risk analysis and treasury management. The back

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5.What are the types of IB? (What is a bulge bracklet and a boutique IB?

Bulge Bracklet engage in all kind of activities such as underwriting, M&A, trading, merchant banking,
investment management, securities services, and research. Some of the bulge bracket houses are
part of a larger financial holding companies. Example: JPMorgan

Boutique IBs – focus on particular segments and are not part of a larger financial institution

6.What is a financial holding company?

A Financial Holding Company (FHC) is a financial institution engaged in banking related


activities offering customers a wide range of financial services. For example, purchasing
insurance products, and investment in securities. FHC is created by the 1999 Act.
7.What are the differences between Commercial banks and Investment banks

8.An IB is devided to Front-Middle-Back Office. What’s the front office in an IB? What’s the middle
office in an IB? What’s the back office in an IB?

Front Office(Revenue) This is the division that brings in revenue helps institutional investor clients to
buy and sell securities. The salespeople and traders must divide up the large orders, match buyers
and sellers, and get desirable prices

Middle Office(Risk) perform operations such as Risk management: analyzing the market and credit
risk; Corporate treasury: responsible for an investment bank's funding, capital structure
management, and liquidity risk monitoring; Internal control in firm; Internal corporate strategy: firm
management and profit strategy

Back Office( Support) perform operations such as trade confirmation, ensuring that the correct
securities are bought, sold, and settled for the correct amounts, the software and technology
platforms allow traders to do their job
9.What are core activities in an IB? (What does an IB actually do?

10.Describe IB performance recently


11.What are typical types of risks that an IB would face in its operation? (What is market risk? How
can an IB manage it? / What is credit risk? How can an IB manage it? / What is operating and
reputation risk? How can an IB manage it? / What is legal risk? How can an IB manage it? / What is
funding risk? How can an IB manage it?)

1- Risk management: Market risk & Credit risk


2- Market risk is the possibility of an investor experiencing losses due to
factors that affect the overall performance of the financial markets
3- Credit risk is the possibility of a loss resulting from a borrower's failure to
repay a loan or meet contractual obligations.
4- Operating and Reputation risk: An operating failure
5- Legal risk: is thepotential for losses due to regulatory or legal action
6- Funding risk: Maintain a cash position ,borrow large the repo and
securities markets

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