Investment Banks Research Articles

China’s perception of minilateralism and Chinese-style multilateralism

ABSTRACT Chinese-style multilateralism, while exhibiting certain parallels with the emergent minilateral groupings in the Indo-Pacific—such as informality and issue-centricity—distinctly distances itself from these frameworks in official discourse. By examining the perspectives of Chinese scholars and official stances on minilateralism, and exploring China’s evolving conceptual preference for multilateralism, this study suggests that China’s circumspection is not solely attributed to the perceived antagonism and the confrontational undertones of minilateral frameworks in the region. It also stems from the intrinsic disparities between American minilateralism and China’s favoured multilateral approach, characterized by defensiveness, inclusivity, and a distinct preference for scale, with the latter further demonstrated by three case studies: the Shanghai Cooperation Organization (SCO), the Asian Infrastructure Investment Bank (AIIB), and the Lancang-Mekong Cooperation (LMC) mechanism. In this context, Chinese-style multilateralism emerges as a crucial strategy to enhance its resilience against possible scenarios of decoupling or ‘de-risking’ instigated by the U.S., aiming to achieve an equilibrium of institutional power and defend its role as a pivotal player in the Asia-Pacific region and beyond. This paper concludes by looking into the implications of Chinese-style multilateralism for the region as well as its prospect within China’s diplomatic endeavours.

Does state affiliation create information advantage to financial analysts

PurposeRecent studies have documented the significant influence of investment bank relationships on the forecast accuracy of affiliated analysts. However, the literature primarily focuses on investment bank-firm relationships, such as whether the investment bank has underwriter or lending relationships with firms. Little attention has been paid to the impact of investment bank-state relationships. To fill this gap in the literature, this paper investigates whether investment bank-state relationships create an information advantage for affiliated analysts.Design/methodology/approachWe empirically test the information advantage of state-affiliated analysts using a large sample of analyst forecasts from China spanning the period 2008 to 2020. Specifically, we investigate whether state-affiliated analysts issue more accurate and timely forecasts around macro events. To address endogeneity concerns, we examine instances where analysts move between state-affiliated and non-affiliated banks, as well as changes in the controlling structure of investment banks.FindingsWe find that state-affiliated analysts demonstrate greater accuracy in forecasts driven by macro events, indicating their information advantage. This effect is more pronounced under conditions of heightened economic policy uncertainty and closer ties between investment banks and the state. After transitioning to a non-state-affiliated investment bank, analysts no longer maintain the ability to make superior macro-event-driven forecasts. Conversely, when the investment bank's affiliation changes from non-state to state, financial analysts gain an information advantage following the establishment of new state affiliation. Additionally, state-affiliated analysts tend to issue more assertive forecasts in response to macro events, which are subsequently echoed by their peers. Furthermore, this information advantage is recognized by investors, enhancing stock price informativeness.Originality/valueFirstly, we contribute to the literature on the economic implications of state ownership in financial intermediaries. Secondly, we enrich the existing literature on financial analysts by acknowledging the pivotal role of investment bank relationships in shaping analysts' behaviors. Lastly, unlike existing literature that treats forecasts driven by macroeconomic events and those influenced by firm-specific events as a homogeneous category, this study contributes to the literature by innovatively categorizing analyst forecasts into two distinct types.

A panel data analysis application to determine the factors affecting the return on equity capital of development and investment banks during times of inflation

A panel data analysis application to determine the factors affecting the return on equity capital of development and investment banks during times of inflation

Limits of bank regulation in financialised capitalism: lessons from the 2023 US banking crisis

ABSTRACT In this article I argue that banks continuously build new business models in financialised capitalism. Market value of these business models is regularly calculated and reported to the investors by investment banking expertise. What the US banking regulators, in their ex-post analysis, declared as unsustainable business models in the three failed banks – Silicon Valley Bank, Signature Bank, and First Republic Bank – in the Spring of 2023, had been promoted by equity analyst expertise as value-maximising ‘niche’ bank business models serving the disruptive technology start-ups after the Covid pandemic. The article argues that bank regulators’ power is severely constrained in financialised capitalism where stock market valuations of banks and equity-based remuneration of the executives are out of regulatory reach. Therefore financial stability mandate of central banks is undermined with significant risk to the society when business models of banks are legitimised by a financialised valuation regime that prioritises shareholder value creation.

Future of knowledge management in investment banking: Role of personal intelligent assistants

Purpose: The study’s objective focuses on investigating the involvement of Personal Intelligent Assistants (PIAs) in the Knowledge Management Process (KMP) in Investment Banking Companies leading to Industrial Revolution 5.0 leading to effective Organizational Knowledge Management. Design/Methodology: A Self-administered Survey Questionnaire was circulated to 695 employees of Investment Banking Companies operating in Bangalore, Mumbai, Delhi, Hyderabad, Chennai, and Pune using the Cluster Sampling method. The Covariance-based Structural Equation Modelling (CB-SEM) and Gradient Boosting Regression technique of Machine Learning were used to validate the hypothesis through JASP V.18 Software. Knowledge Creation, Knowledge Sharing, Knowledge Retrieval, Knowledge Application, and Organizational Knowledge Management are the crucial constructs considered in the study. Findings: The results revealed that Knowledge Application is the most influencing factor in effective organizational Knowledge management among the Investment Banks followed by Knowledge Sharing. It also emphasizes that they have a weak Knowledge retrieval process and minimal efforts taken to create knowledge within these banks. Implications: The PIAs can facilitate effective Data Analysis and research in managing vast data eliminating the repeated tasks in portfolio reconciliation and offering personalized recommendations to manage portfolios. It enables in compliance, risk management, client relationship management, real-time monitoring and leveraged decision-making through predictive analysis.

Assessing the Impact of Technology on the Efficiency and Effectiveness of Investment Banking Services

This paper evaluates the effect of innovation on the effectiveness and adequacy of venture managing an account administrations. It reflects on the way digital innovations such as artificial intelligence, blockchain, and data management systems have transformed such missions as securities underwriting, mergers and acquisitions, and client advisory services. By combining these technologies, investment banks optimize their processes, improve precision, and bring in enhanced customer experiences. Deliberating through critical review of literature and specific cases from the industry, this paper explores how artificial intelligence changes the decision-making processes, automates trading strategies, and enhances risk management, while blockchain changes back-office operations by making transactions faster and more secure. Advanced data management tools equally provide improved insight into the enhanced client services and decisions in investments for the banks. Although this brings cost-cutting and operational efficiency, these technologies pose challenges in cybersecurity and regulatory compliance due to the expansion of digital platforms, which provide increased opportunities for cyber-attacks and a need for strict adherence to ever-changing regulations. The paper provides a panoramic view of the current and future role of technology in evolving investment banking.

A proposal for a common currency based on resources of the Alliance of Sahel States. Theoretical and practical issues

On 6 July 2024 in Niamey, the leaders of Mali, Burkina Faso and Niger signed the constitutive act of the Confederation of Sahel States, at the same time confirming the departure of these three countries from the Economic Community of West African States (ECOWAS). The new Confederation of the Sahel States has decided, among other things, to set up an investment bank and a stabilisation fund. It is therefore plausible that the confederation will soon adopt a common currency. This issue is of utmost importance for many countries so it is worthwhile to see how the proposed new currency will be guaranteed by the natural resources of the Alliance of Sahel States (AES). The aim of this article is to examine the theoretical foundations and practical aspects underlying the creation of a common currency based on natural resources within the AES.

Risks and Financial Indicators in Managing Bank Liquidity in Islamic Banks: A Case Study of Asia Islamic Bank for Finance and Investment in Iraq

The aims of this study to demonstrate the importance of liquidity indicators and the role of liquidity management in addressing liquidity risk and achieving alignment between the bank's objectives of maximizing profitability, determining an optimal level of liquidity and providing security for depositors and shareholders by following specific strategies and working according to specific mechanisms to achieve harmonization and alignment between its objectives Foremost among them is the forecasting, planning and follow-up of the volume and timing of cash flows, early disclosure of possible deficits and surplus cash balance and planning for investing surplus. In addition to using the financial ratios of the legal reserve, the legal liquidity ratio and the cash balance ratio through which the liquidity risk can be addressed and the bank's objective of securing optimal cash liquidity, maximizing profitability and providing security to the parties dealing with it can be achieved. Liquidity management should also pay attention to creating compatibility, balance and harmonization in the management of assets and liabilities and the role of reserves in securing liquidity.

Evaluating and Improving Relative Efficiency The Banking Sector in Iraq Using Data Envelopment Analysis of The Output-Oriented VRS Model With Application

The banking sector is one of the important sectors in Iraq, and the last stage witnessed the emergence of several private banks in the competition market, and in order to determine the efficiency of existing banks, the resources available to government and private banks were analyzed and compared with two international banks to determine their efficiency ratios for the surveyed banks using data envelopment analysis, the research problem was diagnosed in the lack of interest in measuring the efficiency of banks by exploiting the resources available to maximize profits, the aim of the research is to determine the efficiency of the banks studied according to the direction of outputs and to conduct continuous analysis of the results in order to come up with recommendations that contribute to improving the banking sector. The research focused on the direction of increasing outputs with constant inputs in order to maximize returns. The( Deap2.1) data analysis program was used, and the research adopted data for 2022 to measure efficiency. For 22 banks operating in Iraq (governmental and private) and two banks outside iraq, the variable volume returns (VRS) model was used, and the most prominent results achieved were the achievement of banks The following banks (Rasheed, industrial, TBI, Al-Ahli, Asia, National,trans-Iraq, Jordanian capital, Lloyds Banking Group London) achieved high efficiency100% as they used their resources optimally. The investment bank achieved 90.8%, which is a good percentage, with the ability to benefit from the expertise of industrial and national banks, Jordanian capital, and Lubd's Banking Group London to reach 100% efficiency in 2022.

The Role and Impact of Investment Banks in the IPO Process of High-Tech Enterprises

As China's comprehensive strength continues to grow, new opportunities arise for the development of high-tech industries. An increasing number of high-tech enterprises are entering the capital market through Initial Public Offerings (IPOs) to raise funds, expand their scale, and enhance brand influence. Investment banks play a crucial role in this process. As professional financial institutions, investment banks provide indispensable services, including professional consultation, due diligence, and risk management. Additionally, investment banks can leverage resources from other industries to assist in the development of high-tech enterprises, guide them in standardized management, enhance brand value, and help these companies achieve stable growth in a competitive environment, ultimately bringing greater economic and social benefits.

Measurement of the Financial Performance of Banks for Development and Investment in Türkiye by CAMELS Analysis

Using the CAMELS analysis approach, this study examines the financial performance of banks operating in Türkiye for development and investment. Accordingly, a comparative performance evaluation has been conducted using the financial data of 12 banks for development and investment, comprising three state-owned, seven privately owned, and two foreign-owned banks, for 2020-2022, with 22 financial ratios. At the end of the analysis, it was observed that Golden Global Investment Bank Inc. exhibited the best financial performance in 2020, Diler Investment Bank Inc. in 2021, and GSD Investment Bank Inc. in 2022, among the other banks for development and investment. The worst financial performance, however, was demonstrated in all three years by BankPozitif Credit and Development Bank Inc.

Underwriting syndicate structure and foreign IPO underpricing: A team production perspective

Grounded in team production and agency theory, we investigate investment bank opportunism in the context of 466 foreign initial public offerings (IPOs) in U.S. equity markets from 2009 to 2023. Findings reveal that IPO underpricing is higher for foreign firms underwritten by larger and more diverse syndicates owing to concerns about free-riding and moral hazard. Our results are robust to a series of sensitivity tests. Moreover, frequent foreign IPOs by home-country firms and strong home-country legal protection for investors attenuate the positive relationship between underwriting syndicate size and diversity and IPO underpricing. By delineating the collaborative nature of IPO underwriting, this study offers new insights into the implications of syndicate structure for foreign IPO performance.

Strategies for Mitigating and Managing Risks in Bank Investments

This paper suggests that while studies of banking risk management often emphasize analytics and stress testing to improve risk governance, there is too little emphasis on historical case studies to generate comprehensive risk management strategies. Using numerous case studies, the paper suggests four categories of risk - market risks, credit risks, regulatory risks, and operational risks - that impact overall investment outcomes. By extensively reviewing both historic failures and historic successes, the paper highlights the importance of understanding different types of risks and adopting strategic measures to manage them effectively. Emphasis is placed on the necessity of a diversified investment portfolio to mitigate market volatility and credit exposure. Additionally, the paper provides actionable strategies for navigating regulatory complexities and operational challenges, supported by real-world case studies and practical examples. This research aims to equip investors with valuable insights and tools to optimize investment opportunities while minimizing potential risks in the banking sector.

Pengaruh Penggunaan Digital Banking dan Minat Investasi terhadap Pertumbuhan Ekonomi di Jawa Barat

The advancement of digital technology is experiencing rapid development at any time. The development of increasingly sophisticated technology has an impact on the development of all business sectors, one of which is digital banks. The purpose of this study is to conduct an in-depth investigation of the use and interest in investment in digital banks in the community in West Java. The method used in this study is a quantitative method. The results of the study show that the use of digital banks is more in demand while investment is still less popular because more transactions use online methods. This study concludes that the use of digital banks and investment interest have a simultaneous effect on economic growth.

Are Mondays different? Evidence from initial public offerings

This paper investigates how and why initial public offerings (IPOs) issued on Mondays differ from those on other days. We provide evidence that Monday IPOs make a significantly larger number of filing price amendments during the road show and set offer prices that exceed the filing price range, resulting in higher positive offer price revisions. We also find that Monday IPOs receive less analyst coverage than other-day IPOs, despite their underwriting fees being the same and their total underwriter compensation being higher. Therefore, Monday IPOs are more likely to change lead underwriters in subsequent equity offerings and have a higher risk of delisting as aftermarket support and maintaining good relations with investment banks are critical for their long run survival. We also investigate why underwriters issue IPOs on Mondays. We suggest four possible explanations for Monday IPOs and find indirect evidence that supports the deliberate road show extension explanation.

Does ICT Investment Affect Market Share and Customer Acquisition Cost? A Comparative Analysis of Domestic and Foreign Banks Operating in India

Competitive banks aggressively invest in information and communication technologies (ICT) to enhance their market share and reduce Customer Acquisition Costs (CAC). This study examines the impact of cumulative stock of ICT investment on (a) deposit and loan market share and (b) CAC of banks operating in India. The analysis uses a longitudinal dataset of 84 domestic and 70 foreign banks from 2000 to 2020, employing a two-step system Generalized Method of Moment (GMM). It is found that ICT investment adversely affects the market share of domestic banks, indicating a need for these banks to strategically invest more in CAC. Conversely, foreign banks are able to increase their market share through ICT investment and reduced CAC, thereby demonstrating greater efficiency in utilizing ICT. The study underscores the strategic importance of cumulative stock of ICT investment for banks. Nonetheless, it is emphasized that ICT investment must be complemented with innovative marketing strategies to enhance customer experience, reduce CAC, and increase market share. Overall, while foreign banks are able to leverage ICT to boost efficiency, domestic banks must leverage ICT to implement targeted marketing strategies and strive to enhance their customer service.

Investment bank reputation and issuance fees: evidence from asset-backed securities

AbstractWe examine the relationship between investment bank (IB) reputation and fees paid in ABS issuance. We compile an extensive instrument level dataset of over 35,000 ABS issued between 1997 and 2018 in the US and the European market. We find that reputation of IBs is influential in determining the compensation they are paid for their services in ABS issuance. On average, reputable IBs receive 3.74% higher fees in comparison to others. Moreover, our results show IBs’ ability to obtain lower initial yield spreads in ABS issuance. Overall, our findings provide evidence to the arguments that reputable IBs with high market presence offer high-quality services and assurance to the market participants (i.e., certification effect) leading to better deals. In return, they are able to charge higher fees.

The impact of accounting disclosure according to the standard (IFRS-16) lease contracts on the efficiency of the finan

IFRS-16 standard showed changes in the quality of disclosure and accounting treatment of lease contracts, which was reflected in the information content of the financial statements. The research deals with the statement of the impact of applying IFRS-16 standard on the efficiency of the financial performance of banks by measuring the level of performance according to financial indicators. The research aims to evaluate the changes in reclassifying lease contracts to financing and operating on the financial position of banks. The financial analysis method was adopted, relying on some of the main financial indicators to evaluate the financial performance of Mansour Investment Bank, the research sample, such as the ratio of debt to equity, the ratio of fixed assets to equity, and some other indicators. The most important conclusions are that there is a clear impact in applying the standard on the efficiency of the bank's performance, the research sample. The most important recommendations are the necessity of applying the standard to all Iraqi banks in order to enhance the qualitative characteristics of accounting information in financial statements and increase the efficiency of these banks in the financial markets.

The impact of investment banks going public on underwriting behavior: Evidence from IPO clients’ earnings management

This study examines the economic incentive theory, positing that listed investment banks facing significant economic pressure are likely to compromise their underwriting quality to meet client demands. Analyzing Chinese IPO firms from 2006 to 2020, we observe that those underwritten by listed investment banks demonstrate more substantial earnings management compared to those underwritten by privately held banks. This tendency is more evident in scenarios where investment banks have stronger economic incentives, weaker corporate governance, and increased performance pressure. We also find that IPO firms underwritten by listed investment banks are likelier to pass the IPO screening by the China Securities Regulatory Commission and secure higher IPO prices through pronounced earnings management. Additionally, these firms show poorer post-IPO accounting performance and stock returns. Our findings suggest that the public listing of investment banks can compromise the impartiality and quality of their services as gatekeepers in the capital market, particularly in emerging markets with limited shareholder rights protection. These results underscore the need for investors, stakeholders and regulators to be vigilant about the potential compromise to the independence of investment banks following their public listings.

Informed Trading of Sell-Side Analysts: Evidence from Class Action Lawsuits

<p style="text-align: justify;"><span style="font-family: 'times new roman', times, serif; font-size: 14pt;">This paper examines whether sell-side analyst-affiliated investors trade stocks before their analysts release material information. Using class action lawsuits, I explore the pre-lawsuit periods and investigate how potentially informed analysts trade their covered firms. The event study finds that analyst-affiliated investors reduce their stockholdings of firms prior to their own analyst downgrades. The findings are more pronounced among investors employed by investment banks. The post-trading performance of analyst-affiliated investors suggests that they have superior information and front-run to maximize benefits.</span></p>