Research On Chinese Investment Bank Development

The appearance and development of investment bank is one of the most famous developments in the finance in twenty century. In the advanced market economy, the modern investment banks, as non-bank financial intermediate institution, play an important role in the capital market. At home, the investment banks also take on driving to set up Modern Corporation system, create a new market financing system and the special task of accelerating the strategy adjustment of economy structure, besides its basic function of intermediate institution. As to the question of developing the domestic investment bank and improving its competition, more and more sophists pay attention to it. This article through comparing foreign investment bank development history, combining with domestic investment banks status, analyzes the major reason why domestic investment bank develop so slowly, and gives out feasible measurements. After joining in the WTO, Chinese financial industry open widely, domestic investment banks will conflict with hard competition from foreign investment banks. It's useful for us to improve the development of domestic investment bank through studying the developing history of foreign investment bank. The investment bank is the direct financing intermediate financial institution, which takes part in securities distribution,broker and corporation combination at the financial market. As an industry, the investment bank is an professional financial industry to provide capital operation for the whole economy system. On one hand, investment bank developed with the development of market economy, whether the economy system is perfect or not will affect the investment banks operation. The government, as an vindicator of the market system, will not only reduce the loss of the whole society, but also help the market keep on competition and development, if it worked to mend the failure of market, or else, if governors intervene the market too much, it will disturb the normally operation of market, even do great harm to market system, On the other hand, during the process of foreign investment bank development, foreign investment bank keep on strong impetus to conquer all kinds of difficulties by developing new operation fields and creating new financial tools. Compared with foreign investment bank, it seemed that there was much more government supervise than investment bank itself to make operation creation in the domestic investment bank developing history. According to the development of domestic investment bank, under the government's commanding and helping, after almost ten years of development, domestic investment bank has abstained the competitive "hardware", comparing with foreign investment bank. But on "software", domestic investment bank was dropped behind greatly by foreign investment bank On one hand, the outside condition of domestic bank is faulty. As the base of investment bank, domestic securities market holds the development of domestic investment bank. Securities market environment of domestic investment bank development. Although the size of domestic securities market has increased greatly, we still trailed the advanced market very much. The state firms still are dominating in the list firms and only one of third shares of List Company can deal freely. More and more institute investors enjoined, but the individual investors are still the major strength at securities market. Although there were more and more institution investors joined in the securities market, the litter investors still dominated the whole market. The securities market jurisprudence had established, the government also paid much more attention to push boost the standardization of securitiesmarket, in order to enhance the competent capability of domestic investment bank, but it seemed that government had did more than what it was expected. Just like government plays an important role in several domestic investment bank recombinations recently, On the other hand, the inhesion of domestic investment banks were not as good as foreign. Comparing the income structure with foreign investment bank, we can find that the income of domestic investment bank mostly depend on the traditional operations and only little modern operations, which leading to domestic investment bank can not enhance the capability of resisting risk by decentralization of income. The capital scale of domestic investment bank was not big enough, which restricted the development of domestic investment bank badly. First of all, domestic investment bank can't resist all kinds of risks effectively. such as securities distribution risks,corporation combination risks ,self-support operation risks ,and so on, all of these kind of risks need enough capital to support. Second, being lack of enough capital restricted the development of domestic investment bank badly. Corporation combination especially between big corporations usually need mint capital. Last one, being lack of enough capital, domestic investment bank become less competitive than others countries'. From the experience of advanced country, before entering into foreign market, most big investment bank paid much attention to target country macroeconomic, market status, following the production design, operation innovation etc. while in domestic investment bank, because of lack of durative fund, the research department can't provide strongly support to investment bank's internationalization. The huge domestic market attracted lots of big foreign investment banks, such as Morgan Stanley and Goldman Sachs. Domestic investment bankswhich had no more than twenty years history were disadvantage than foreign investment banks from outside environment to self capability. But we also should realize that for one reason, all of international companies depended on domestic market before entering into international market. In China, where there were one of fourth world population, the fast increasing economy and more and more perfect market system created and widest growing space for domestic investment banks; for another reason, the foreign investment banks were good at a typical capital market, while Chinese economy was still in the shunt-stage. Domestic market has its own particularity. Such as, the recombination of national companies, the goal and method of recombination were all different from typical market. So most foreign investment banks feel unfit for when taking part in domestic projects, while domestic investment banks always could find the best methods to deal with. Domestic investment banks should make the best use of this chance to expand its operation field, consolidate domestic market and make enough preparation for international competition. To develop domestic investment bank we should: Through multi-property right, consummate the investment bank's corporation structure, set up the inspirit mechanism. First, according to the specialty of investment bank industry, establish the suitable going pubic rules; Second, upgrade the big investment banks into Finance holding company, peel off the choice capital going public. Finance holding company structure was benefit to controlling risk and this kind of structure was also accord with the trend of modern finance. As an order vindicator, first of all, government should hold an important principle bring market function into play, Second, focus on sociality management instead of economic management, trying to create an fair competent environment;Last, government should change its working center into enhancing investment bank interior controlling.Recent two years is the key period of domestic investment bank and domestic capital market. The most important thing for domestic investment bank is how to make the best use of this period to develop and make enough preparation to face hardly foreign investment banks'competition First, realize multi development by creating operations. Because lack of financial products, domestic investment can't meet the investor's need, which also restrict investment bank itself capability of distribution and investment. So investment should take advantage of its human resource and strong research capability to create new financial products. Second, widen financing channel, buildup capital strength, boost its use of capital market intermediaries. As to the status of scale of domestic investment bank was still too small, domestic investment bank should expand its scale by going public financing, purchase, merge and recombine. Lastly, domestic investment bank also can through seeking for cooperating with foreign investment banks, learning advantage management methods, in virtue of foreign investment bank's experience and strength, better its corporation management structure, create operation and train its own human resource and figure its own brand. The trend of international finance transfer from separate operation system to mix-operation system is impacting the whole world investment bank system. According to the relationship between commercial bank and investment bank, we can class the development method of investment bank into: independency develop mode, omnipotent bank affiliated develop mode and finance holding company mode. American finance holding company mode, as a structure creation, succeed in cooperate effect, not only impacted the independency develop mode, but also challenged the European traditional omnipotent bank affiliated develop mode, which also set an good example for world investment bank. China is at high speed developing stage now, which provides enough...