Analysis On The Investment Banking Business Of Chinese Commercial Banks

With further deepening of economic globalization and financial integration, commercial banks and investment banks in western developed countries speed up business inter-infiltration, many outstanding omnipotent banks have been formed. Following the intensification of international competition environment and more open of our national financial market, commercial banks in our country also start to take active part in business development of investment banks.The paper mainly adopts case analysis method to do research on basic situations of investment banking developed by commercial banks in our country. It primarily divides into five sections to do research and analyze it.Section I is introduction. It focuses on the introduction of research background and its purpose in the paper, as well as research methods and logic framework. Historical period of financial system reform possesses practical significance and value.Section II is theoretical analysis of investment banking developed by commercial banks and it is spread from three perspectives.1. From the perspective of difference and similarities between commercial banks and investment banks. Commercial banks and investment banks experienced from mixed operation to separate operation, and from separate operation to comprehensive operation. Their separation is required by macro-risk management of financial market, and their integration is the result of competition and innovation.2. From the perspective of economics, it illustrates the classic theoretical basis of investment banking developed by commercial banks. The investment banking developed by commercial banks is the inevitable choice to pursue maximum profit. Financial functional theory thinks different business modes of financial business own specific functions; however, asset specificity theory thinks there is low-rise conversion cost between commercial bank and investment bank. These theories further solve the obstacles to make commercial banks develop as investment banks, and stress the inevitabilities for the tendency of mixed operation.3. Financial environment analysis. Section III is to analyze current situation of commercial banks to develop investment banking in our country. It also develops from three perspective.1. It introduces the experience of overseas commercial banks to develop investment banking, and it is regarded as reference and contrast object with current situations in our country. Omnipotent banks are the most typical models at present, and it is also the adopted model for commercial banks in our country.2. It illustrates relevant legal regulations of mixed operation and the procedure of domestic main commercial banks to develop investment banking. At the general background of monetary system reform, commercial banks in our countries develop investment banking one after another, and achieve some scale and effect.3. It mainly teases up the facing troubles in the progress of investment banking development, including the change of outer environment and bottlenecks of domestic management. The section concretely analyzes the tendency and progress of commercial banks to develop investment banking in our country, and mingle hope with fear.Section IV. It takes The Agriculture Bank of China as an example and makes specific analysis of its business to develop as investment banking. It primarily includes the contents from three perspectives.1. It proposes the company’s business to be developed as investment banking and its definition.2. The progress of company’s business to be developed as investment banking in The Agriculture Bank of China.3. It specifically presents the existing problems of the business to be developed as investment banking in The Agriculture Bank of China.Finally, it comes to a conclusion. It is not only objective and necessary, but also subjective and inevitable for commercial banks to develop investment banking in our country; however, the progress to develop investment banking is winding and exploratory; during exploratory progress of the business in commercial banks to be developed as investment banking in our country, it is inevitable for us to meet many problems. As one of the research purposes, the paper proposes relevant suggestions on the implementation to develop investment banking in accordance with domestic and overseas experience as well as its facing problems.