A Comparative Study On Investment Banking Between China And US

Along with the internationalization of RMB, China is preparing to promote two-way open capital market. China’s investment banking business is facing with challenges and opportunities. Faced with competition from the advanced international investment banking, whether Chinese investment banking industry can seize the initiative to obtain the discourse power in the construction of capital markets, will have significant meaning for further promoting China’s international prestige.Firstly, the article analyzes the current situation and main problems of investment banking business. The overall assets of investment banking stable growth, leverage rapid rise, Operating income growth, but revenue structure not much changed; A rapidly increasing number of investment Banks and practitioners.But our investment banking exist some problems, such as small asset size, lack of profitability, simplification of earnings structure. While the present situation of US investment banking business are big different in our country. The traditional business income accounts for the relatively small, innovative business and extended type business development mature, in the total revenue accounted for. And there are three characteristics of the U.S. investment banking:a wide variety of business types, improved business function, more professional business. After the specifically analysis of the current situation of both Chinese and the American investment banking business, the author compered them in the traditional business, innovative business and extended type of business, as well as the asset size, operating leverage rate and business structure of the investment business in two countries are also compared in the article. After that, the author analyzes the reasons which caused the differences of investment banking business of two countries from four aspects.Using the method of comparison, this article compared the differences of investment banking, put forward the causes of the differences between the two countries:Firstly, the different institutional structure and sources of funding lead to different market structure; secondly, the different market structure leads to further gap of capital scale and industry concentration; thirdly, different internal organizational structure causes different business structure; fourthly, healthier laws and more stringent regulatory regime are premise of obtaining relaxed environment for innovation. In the end, the author concludes that enhancing the capital strength, basing on the real economy, reforming of the examination and approval system, and broadening the business types will improve the Chinese investment banks to the international first-class investment bank’s direction. At the same time, paying attention to prevent the financial risk, operation risk and business diversification risk in a diverse business development process.