An investment bank is a financial institution that organizes for large companies and governments to raise capital in the global financial markets, provides consulting services when buying and selling a business, brokerage services, being a leading intermediary in trading stocks and bonds, derivative financial instruments , currencies and commodities, and produces analytical reports for all markets in which it operates.
In the English-Russian Banking Encyclopedic Dictionary by B. G. Fedorov, an investment bank is defined as a bank specializing in organizing the issue, guaranteeing the placement and trading in securities; also advising clients on various financial matters, focusing mainly on wholesale financial markets (in the US), or as a non-clearing bank specializing in medium and long-term investments in small and medium-sized companies (in the UK).
An investment bank is a financial intermediary that can perform many services. These include underwriting, acting as an intermediary between the issuer valuable papers and investors, assisting with mergers and other corporate reorganizations, and providing brokerage services for institutional clients.
Investment banks are not banks in the classical sense, because they do not perform the main banking operations- deposit and credit, but act as financial intermediaries of legal and individuals organizing the issue of securities and making transactions with them on the stock market. In developed markets, investment banking activities are complemented by operations in the secondary securities market related to the provision of services for the restructuring of the client's business (mergers and acquisitions).
There is no clear definition of the concept of an investment bank in Russian legislation. Analysis legislative framework stock market in Russia allows us to conclude that commercial banks can act as investment banks.
Today, the specialization of banks as investment banks is a completely independent and voluntary decision of the owners and management. KIT Finance Investment Bank, BCS - Investment Bank, etc. position themselves as Russian investment institutions. At the same time, they, as a rule, are not limited to investment activities only and are also ready to provide other services to their clients.
The differences between commercial and investment banks, first of all, are that they work with different financial instruments through which the redistribution of monetary resources is carried out. The basis of the activity of a commercial bank is direct bank lending, settlement and cash services and attraction of funds in deposits. The basis of an investment bank is operations with securities (underwriting, raising funds based on the issue of securities, brokerage, dealer operations, trust management of securities, investment advice on transactions with securities).
Main characteristic features investment bank are:
- a large universal commercial organization that combines most of the permissible activities in the securities market and in some other financial markets;
- the main activity is to attract financing through securities;
- operates primarily in the wholesale financial markets;
- gives priority to medium- and long-term investments;
- securities are the basis of its portfolio, while most investment banks are most focused on non-government securities.
There are currently two types of investment banks:
- banks of the first type (engaged exclusively in trading and placement of securities);
- banks of the second type (engaged in long-term lending).
Investment banks of the first type act as founders, organizers of the issue of securities, as well as guarantors who act on a commission basis or pay a predetermined amount, regardless of the subsequent placement of shares and bonds. On behalf of corporations and the state in need of long-term investments and resorting to the issuance of shares and bonds, investment banks assume the responsibility for determining the size, conditions, period of issue, choosing the type of securities, as well as for placing and organizing secondary circulation.
Investment banks of the first type guarantee the purchase of issued securities by purchasing and selling them at their own expense or by organizing banking syndicates for this, provide loans to buyers of shares and bonds.
Institutions of this type currently conduct transactions with securities of the corporate sector of the economy. By placing shares and bonds, they serve as intermediaries for obtaining funds by industrial, transport and trade enterprises. They also perform functions related to raising capital, servicing the securities market:
- engage in secondary placement of shares and bonds;
- act as intermediaries in the placement of international securities (Eurobonds and Euroshares) on the Eurocurrency market;
- advise corporations on investment strategy, accounting and reporting.
Banks of the second type differ significantly from banks of the first type in organizational structure, functions and operations. They can be based on a joint-stock basis, a mixed form of ownership with the participation of the state, and a purely state-owned one. Their main function is medium-term and long-term lending to various sectors of the economy, as well as special targeted projects related to the introduction of advanced technologies and the achievements of the scientific and technological revolution.
In Russia, investment banks are most actively developing the following types of services:
1. Feasibility study of investment projects, including an assessment of the potential efficiency and feasibility of projects, development of investment programs and preparation project documentation in accordance with international standards.
2. Formation of optimal issue portfolios (development of programs for attracting investments by enterprises, selection of tools for attracting financial resources, development of schedules for the issue of debt and equity securities with justification of the optimal ratio between them, assessment of the possibility of attracting funds in various regions and substantiation of a rational level of return on issued securities).
3. Underwriting (placement of issuers' securities on the market). In the Russian version, underwriting, as a rule, is carried out according to the principle of commission trading in shares, in which the underwriter undertakes to make every effort to sell the shares, but does not assume a firm obligation to place.
4. Formation of optimal individual portfolios of securities for large investors based on the analysis of the current state financial market and construction of investment target functions for a given date. Sometimes this type of service is supplemented by a trust (current management of investment portfolios by agreement).
5. Brokerage services (completion of civil law transactions with securities as an attorney or commission agent), as well as dealer services (completion of transactions with securities on one's own behalf and at one's own expense by quoting securities).
6. Consulting on investment issues, selection of a foreign investor for enterprises, selection of investment subjects for investors.
To provide the above services, an investment bank develops several types of activities that can be divided into external (directed directly to the client and to counterparties that form services) and internal (creating the necessary prerequisites for the implementation appearance activities).
Investment banking is not only the most "prestigious" direction in the activity of an investment bank, but also the most profitable. Therefore, all large and ambitious companies in the securities market seek to receive funding projects (in other words, they seek to grow into an investment bank).
In developed markets, investment banking activities are complemented by operations in the secondary securities market related to the provision of services for the restructuring of the client's business (mergers and acquisitions).
In foreign investment banking there are two main areas:
- attraction of financing;
- Mergers and acquisitions.
In addition, investment banks often actively trade controlling stakes in small and medium-sized corporations not on behalf of clients to restructure their business, but in order to obtain speculative profits. At the same time, during the period when an investment bank holds one or another controlling stake, it can carry out financial rehabilitation of this enterprise, optimization of the finances of this corporation, as well as other measures aimed at increasing the market value of this block. Such activity is being carried out quite widely at present by some Russian investment companies.
Attracting financing most often implies a form of placement of the client's securities, however, options for raising financing through the creation of venture capital enterprises and the use of mechanisms are not excluded. investment lending.
This type of activity naturally breaks down into a number of more specific types of activity:
- financial consulting for a client wishing to raise financial resources by issuing securities;
- underwriting syndication, i.e. creation and management of syndicates of underwriters;
- promotion of the client's securities on financial markets;
- Servicing the client's securities in the secondary market.
Typically, within the framework of investment banking, such a direction as corporate financing is singled out, which implies raising financing for corporate clients, i.e. assistance in attracting additional capital by corporations - clients of the investment bank. Currently, only a very small proportion of investment banks are involved in raising finance for governments and municipalities, so for most other investment banks, the terms "investment banking" and "corporate finance" are essentially the same.
For an investment bank operating in a country with a developed financial market, mergers and acquisitions often become the main area of income. Many Russian enterprises and financial groups have not yet reached the level of development when there is a need for the services of an investment bank for mergers and acquisitions. In Russian conditions, mergers and acquisitions are often understood as operations with large blocks of shares. However, the activity of buying and selling individual enterprises is not identical to mergers and acquisitions. The activities of an investment bank during mergers and acquisitions can be divided into the following components:
- consulting activity by definition the best option business restructuring;
- attraction financial resources to carry out mergers and acquisitions;
- restructuring of a separate company and the sale of its parts;
- development and implementation of effective protection of the client from absorption;
- accumulation on the market of large blocks of shares by order of the client (purchase of large blocks), sale of large blocks.
Securities trading activities are carried out as a tool to support investment banking activities (sales of placed securities) and asset management activities (purchases and sales of securities in the process of restructuring a securities portfolio). At the same time, in developed financial markets, securities trading is understood not just as the process of concluding securities purchase / sale transactions, but the implementation of complex trading and arbitrage strategies, consisting of both many simple purchase / sale transactions and more complex transactions.
Organization of securities trading within an investment bank or large investment company- a separate area of business and science, which has its own complex patterns and technologies. This type of activity is mastered by market participants in the first place. In most cases, large Russian market participants have fairly high-tech subdivisions involved in securities trading.
One of the activities of investment banks is the provision of financial analytics on securities traded by the bank. This activity in itself, as a rule, does not bring profit. On the contrary, it has become one of the most expensive in investment banks. That's why this species activities can be classified as intermediate between external and internal activities of an investment bank.
Modern investment banks in countries with developed financial markets spend everything more money to develop their research teams. One can point to at least two reasons for the bankers' love of research.
1. Research and recommendations provided to clients are a kind of "face" of an investment bank, indicating its capabilities and indicating the quality of services of this bank. The first step in attracting a client is to present your research, recommendations, market assessments, forecasts.
2. High-quality research work is the basis of successful investment management and fundraising activities. The higher the quality of analytical work in an investment bank, the more profitable asset management, the greater the volume of attracted financial resources, and the conditions for attracting are more profitable.
Asset management (or investment management) is aimed at managing both the investment bank's own funds and the management of portfolios formed at the expense of clients' funds. An investment bank may provide resource management services, for example, in the US stock market, resource management services in the British bond market, as well as in any other market or sector, group of markets. In this case, the client can either invest and withdraw money on any day by contacting the manager, or do it only on certain days, or use the stock exchange for these purposes.
All funds managed by an investment bank are suppliers of financial resources to its general portfolio, the structure of which is largely determined by the structure of resources attracted through various funds. In addition to client resources, this portfolio also includes own funds. Managing this portfolio is called investment management.
When managing investments, the recommendations of the analytical department of the bank are used. He also develops dynamic portfolio models that become targets for that part of the investment bank that carries out securities trading activities.
The essence of this activity is the storage, guardianship, guardianship, accounting of clients' securities, storage and accounting of own securities and other financial assets. Legally, in most cases, this type of activity is outside the scope of a legal entity that performs the functions of an investment bank, but this necessary part of the activity is aimed at providing complex services. Therefore, technologically, this type of activity becomes an obligatory element of the activity carried out by a universal investment bank.
To perform external activities, the investment bank also develops internal activities that provide normal operating conditions for those units that carry out external activities and make a profit.
The largest items of income for an investment bank include:
- income from the provision of services to attract financing;
- income from own portfolio management;
- Income from the provision of customer portfolio management services;
- Income from the provision of brokerage services.
An investment bank initially begins to manage its own funds (or funds of the founders). Profitability from such activities can fluctuate in the modern Russian market within significant limits (from losses of 100% per annum to profits of several thousand percent per annum).
The essence of the investment activity of the bank
The modern world financial market is characterized by the predominance of the banking sector, since the latter is endowed with the largest investment potential.
Definition 1
Investment activities of commercial banks represents the implementation by financial and credit institutions of investments, as well as various measures aimed at obtaining in the future an economic or any other (social, environmental, etc.) positive effect.
Income from the investment activities of a commercial bank can be divided into two groups:
The main objects of investment activity of commercial banks are securities, real estate, modernized or newly created objects of fixed assets of enterprises, cash deposits, foreign currency, precious metals, objects intellectual property etc.
The main areas of investment activity of banks:
When investing, each commercial Bank sets itself a whole set of main and secondary goals (conditioned by its investment strategy and subordinate to it).
Basic goals investment activities of commercial banks:
Thus, in most cases, it is the safety of investments that is given the highest priority (rather than their profitability, liquidity and growth in volumes). The optimal balance of profitability and investment security can be achieved through a thoughtful, rational and clear diversification of the investment portfolio.
indirect goals investment activities of banks:
Income from the investment activities of a commercial bank may consist of:
It is well known that commercial banks are one of the components of the country's economy. They have the opportunity to influence it through the implementation of investment activities. Relations with banks take place in various forms, as in a simple everyday, when an ordinary person enters into an agreement term deposit. But there are also such special clients when, in the course of developing their business, they want to enter the foreign level, launch a new branch of production, but often they do not have the funds for these purposes. In such cases, so that the plans do not remain just on paper, it is necessary to involve a financial intermediary, in the role of which it acts.
To figure out what this very bank is, first you need to define what we mean by the phrase investment activity or investments. In the broadest sense, these are investments of cash equivalent in various, for example, agriculture or industry. The economy knows several models for the implementation of investment activities. The first model for the successful implementation of investment activities is the impossibility of combining investment activities and the activities of an ordinary commercial bank. Economists argue that it is precisely the separation of actions to attract and invest deposits and operations with securities that can lead to high performance. This method was first used in the USA in the 30s of the 20th century. Also, this model is better known as the Anglo-Saxon deposit model. But time has shown that this model not only has a number of advantages, such as attracting large customers, by transforming banks into investment companies, at this time the term appeared. It also became known that this model is practically unable to survive the financial crisis, the banks that united in “exploded” one by one drowning each other, because their assets were interconnected. In order to somehow stay afloat, American banks had to seek help from central bank Russian Federation, the Central Bank of the Russian Federation provided several long-term loans, which several, today successful, US banks owe to it. The next model is typical for European banks, it is called continental and almost completely contradicts the previous one. The essence of this model lies in the conduct of investment activities by universal banks, which sell at the request of customers, carry out and attract deposits. 
AT modern society There are several types of investment. The first and most common type is direct investment. This is the so-called buying up of working assets by the bank in the production itself. The second type is portfolio investment. This is the possession by the bank of a certain percentage of the shares of the total number or the investment of funds in the statutory production, often banks exert a powerful influence on this type of production by means of owning a controlling stake. The third type of investment is very beneficial for small businesses, since it consists in the issuance of subsidies or loans by the bank for the development of production. All this activity is aimed at maximizing both short-term and long-term plans. The maximum effect from such activities is achieved with the help of competent investment policy planning, these issues are dealt with by special services of the bank. Based on the foregoing, we can conclude that in addition to the three main models of the global investment market, this sector of the economy is very diverse and continues to develop, giving rise to more and more novels. For example, junk were an innovation in the middle of the last century, and now they have occupied a free niche in this business and have firmly established themselves. Stay up to date with all important United Traders events - subscribe to our
0Introduction
The efficiency of the global financial market is not least characterized by how and at what cost meetings of creditors and borrowers are held. Financial intermediaries - financial institutions that are professional participants in the financial market - are called upon to contribute to the optimization of this process. Such intermediaries include the so-called investment banks.
Having passed a long way of formation, investment banks only in the second half of the 20th century turned into financial institutions capable of exerting a significant influence on the global financial market and demonstrating wide opportunities for the accumulation and distribution of free capital among its end users. Gradually, these financial institutions formed a global investment banking oligopoly.
Currently, the concept of "investment bank" is widely used by participants in the global financial market (from representatives of the general public to heads of state, members of various international organizations and employees of financial institutions). This concept has been successfully established in the everyday life of the Russian media, in economic scientific and business circles, and in the Russian financial market. Therefore, ignoring this concept and denying the possibility of analyzing these financial institutions and their activities seems unreasonable.
Relevance of the topic term paper due to the fact that on the part of government officials and the business community one can often hear statements that one of the main conditions for the development of the Russian economy is the expansion of investment activities of the banking sector. One of the main directions for the development of the entire banking system in the long term is a significant increase in the share of lending in the material sector of the country's economy. Depreciation of fixed assets in most industries material production has reached a critical value of 70 - 80%, which threatens major man-made disasters and accidents.
The theoretical foundations of the investment activity of banks and its implementation features in the conditions of modernization of the Russian economy are considered in the works of such Russian economists as E.F. Zhukov, O.G. Semenyuta, L.L. Igonina and others.
Representatives of foreign economic schools, such as D.N. Enand, A.D. Morrison and others.
The purpose of the course work is to study the features of the activities of investment banks and the prospects for their development in modern Russian conditions.
In accordance with the goal in the course work, the following tasks are solved:
Analyze the essence of the concept of "investment bank";
Explore the role of investment activities of banks in the economy;
Study investment models - banking systems;
Analyze the main activities of investment banks;
Explore the prospects for the work of investment banks in the securities market;
Consider development issues project finance(investment lending) in the investment activities of banks.
The object of the study are the leading investment banks of the USA, Great Britain, Germany, Japan, China, India, Brazil and Russia. The subject of the study are the features of the activities of investment banks of these countries at the national and global levels.
The information base of the course work was made up of theoretical developments of domestic and foreign economists, materials of general and special publications of an economic and financial nature, data from leading research economic and financial institutions and organizations, as well as legislative and regulatory acts of a number of countries. Sources from the Internet were widely used.
Essenceconcept of "investment bank"
The essence and principles of the work of investment institutions in the modern Russian economy have been studied and studied quite diversified. The activity of investment institutions in the securities market, the activities of investment banks as investment institutions, and the management of investment institutions are considered. However, at the moment there is no single generally accepted concept of an investment institution. There is no consensus on which organizations belong to investment institutions. In order to define this concept, we will not be able to resort to legal definitions, since they simply do not exist in the legal systems of most countries.
Many researchers believe that the United States is the progenitor of investment banks, but even in the US legal system, the concept of "investment bank" (investment bank) does not appear. If we turn to the main documents of US banking legislation directly related to the topic of the study, we will find that the concept of "investment bank" (investment bank) is not fixed in these documents. It is not even in the well-known Legislative act of Glass - Steagall (Glass - Steagall Banking Bill of 1933), which divided commercial and investment banking in the USA in 1933.
As for dictionary and theoretical sources, both domestic and foreign, they offer different definitions of the concept of "investment bank", but, as a rule, they are all based on the listing of operations performed by these financial institutions.
“An investment bank is an institution that specializes in issuing, guaranteeing the placement and trading in securities, also consulting clients on various financial issues (primarily on mergers and acquisitions), while focusing mainly on wholesale financial markets (for conditions USA)" - and as - "a non-clearing bank specializing in medium and long-term investments in small and medium-sized companies (for UK conditions)".
"An investment bank is a large general-purpose commercial organization that combines most of the eligible activities in the securities market and in some other financial markets."
An investment bank is financial institution specializing in operations with long-term capital investments, mainly in the field of creating new fixed assets, acquiring shares of industrial corporations, and implementing individual investment projects.
"A bank dealing in securities and offering financial services like trading of securities, the raising of capital, or managing mergers and acquisitions is an investment bank" funds or management of mergers and acquisitions, is an investment bank).
Investment bank is an institution which acts as an underwriter or agent for corporations and municipalities issuing securities
Thus, on the basis of the above definitions, it can be assumed that the concept of "investment bank" has both private and general definitions. So, in a number of definitions, the idea is traced that an investment bank is a financial and credit institution engaged in investing in industry, agriculture, construction and other sectors of the economy. At the same time, investments are made, most likely, in the form of direct, real cash injections into the fixed and working capital of an economic entity. This idea is confirmed in practice. For example, there is the European Investment Bank (EIB). It was established in 1958 in accordance with the Treaty of Rome establishing the "Common Market". The EIB serves several European countries, issues bonds and provides loans to public and private enterprises in these countries and a number of African states. Most of the Bank's loans go "to create and improve infrastructure (construction of railway and highways, harbors, communications enterprises) and the development of agriculture”.
In addition, there is, for example, the China Investment Bank (CIB), which was established in 1981 with the support of the World Bank. The main task of CIB is to inject investments into the real sector of the economy for the development and modernization of small and medium-sized enterprises light industry. By investing in this sector of the economy, CIB is trying to smooth out the imbalance that is observed between the sectors of heavy and light industry in the PRC. In addition to China, state-owned investment banks funded by budget funds, available in Germany, Japan, Italy, Turkey and some other countries.
Thus, based on the private definition of an investment bank, it is a large financial institution that operates at the interstate, state (national) and regional levels and attracts direct cash investments in the real sector of the economy or the economy of a particular country
and regulating their intended use.
As for the general definition, it is wrong to define the concept of "investment bank" only by the operations that this financial institution carries out. Definitions that are based on the operations of an institution may be legally justified. It is known that many legal concepts are based on the allocation of individual operations of financial institutions, without which they simply cannot be imagined. This core of operations, as it were, separates and delimits these financial institutions from all others. However, as already mentioned, the investment bank as a financial institution does not have a legal status (in financial systems most countries), which means that the concept of "investment bank" in most countries does not have a legal definition that could be used.
In addition, the allocation of operations carried out by an investment bank does not reveal the essence of an investment bank, but only brings it closer to disclosure.
To determine the essence of an investment bank, it is necessary to refer not to the operations performed by the bank, but “to the macro level of relations between the bank and the economy, ... to the qualitative side that manifests itself at the macro level”, to the functions that the investment bank is called upon to perform. To reveal the essence of an investment bank, it is necessary to consider the specific characteristics that are inherent only or to a greater extent in investment banks; its fundamental quality at the macro level, its structure, its characteristics as an economic institution, its functions.
First of all, an investment bank is a financial institution whose productive nature of activity lies in the fact that an investment bank creates its own specific product. This idea is shared by foreign researchers, for example, Harvard University professor Bharad N. Anand believes that investment banks are “multiproduct companies” (investment banks are multiproduct firms). The products produced by investment banks include:
Securities that are issued by investment banks, as well as derivative and structured financial instruments that are created directly within the framework of an investment bank;
Funds that investment banks raise for certain business entities and turn idle, non-performing funds into working ones. Thus, investment banks "feed" the economy and stimulate the exchange of products of labor and the process of reproduction;
Loans that investment banks make to their clients (private and institutional investors) in the form of cash and securities, and which are returned to investment banks "to their starting point with an increment in the form of newly created value";
A variety of services that investment banks provide to their clients and "the productive nature of which is confirmed by the organic inclusion of profits in the total amount of the total social product created in the relevant period of time."
According to modern economists, investment institutions are one of the components of financial institutions. From the point of view of Professor V.V. Tsarev, an investment institution is "a body that is engaged in investment, that is, long-term investment in various projects (business projects)".
1.2 The role of investment activities of banks in the economy
The essence and functions of an investment bank determine its role in the economy. The role of an investment bank is its purpose, that is, for the sake of which it was created and for which it functions. The purpose of an investment bank is that it accumulates and redistributes monetary resources and in a certain way regulates certain segments of the financial market. Investment banks are "collectors" of temporarily free cash resources, which later go to meet the needs of production, distribution, exchange and consumption. Thus, investment banks contribute to ensuring the continuity of production and circulation of the product, accelerating the reproduction process as a whole.
In addition, investment banks, by placing their own and borrowed funds in various investment projects, contribute to the creation of new industries, the speedy introduction of scientific and technological ideas and achievements into production, and the re-equipment of existing industries with modern equipment and technologies.
Do not forget that an investment bank is a productive institution, a separate business entity, which, in turn, creates its own specific product. The products and services of investment banks, as already noted, “feed” the economy and stimulate the exchange of labor products and the reproduction process, contribute to the increment in value and the total social product created in the corresponding period of time.
Moreover, an investment bank is a kind of regulator of certain segments of the financial market; it seems that it can be called a structure-forming element of the financial market. In this capacity, the investment bank is intended to partly streamline and rationalize the turnover financial instruments(unfortunately, in practice, investment banks have not always coped with this role).
Opportunities largely depend on how stable and efficient the banking sector functions. economic growth and development of the country.
The investment activity of banks has not only economic, but also socio-political significance, contributing to the development of market relations in the economy, creating financial basis for economic activity its subjects. On the basis of investments, new enterprises are created, and existing ones are expanded, new, most modern types of products are being developed. The implementation of entrepreneurial activity is often impossible without the construction or acquisition of buildings for these purposes, the purchase of equipment, Vehicle, technologies and other long-term assets. For such investments, the characteristic features are long term return, reimbursement of these costs, the high cost of objects for the acquisition of which entrepreneurs use both their own funds and attract funds from third parties - creditors, investors. An entrepreneur in the mechanism of entrepreneurial activity acts in two ways - first he attracts funds - investments, then he invests them in fixed assets, intangible assets, securities. When an entrepreneur enters the market in order to occupy his niche in it for a long time, the process of renewal, modernization of fixed assets, as well as attracting funds from investors, goes on continuously.
men, lining up buyers and sellers of stock, bonds and all matter of exotic securities” (In essence, investment banks are intermediaries connecting buyers and sellers of stocks, bonds and all kinds of exotic securities); "Investment banks act as go-betweens in trading and finance" (Investment banks act as intermediaries in trading and in solving financial issues). An investment bank, being a financial intermediary, is designed to perform several sub-functions at once:
Accumulation of funds: an investment bank, acting as a trustee (segments of MC, IF), accumulates significant cash resources of clients, and then sends them to creditors. Through this, there is a "transformation" of retail savings of individual economic entities in wholesale. At the same time, the process of accumulation of monetary resources by an investment bank differs from the accumulation of resources by other financial institutions. Thus, the ownership of the accumulated monetary resources remains with the creditors (customers of the investment bank); the bank cannot use these funds for its own purposes and for its own needs; the bank uses the accumulated funds only for the intended purpose, which was agreed in advance with the clients and in the interests of the clients.
Redistribution of funds:
a) Investment banks into liabilities (corporate papers, bills, structured products). With the proceeds from the sale of these bonds, investment banks can buy debentures and securities of other economic entities. Thus, there is a kind of double exchange of debt obligations. Namely, according to some experts, this is the distinguishing feature of financial intermediaries from others. financial entities(for example, broker-dealer companies that do not issue their own obligations, but contribute to the movement of funds from creditors to borrowers).
Reducing risk by diversifying it:
a) Investment banks, through the MC and IF sectors, do not manage individual financial instruments, but large portfolios of financial instruments acquired with clients' money. Thus, they can at least partly reduce some non-systemic risks, which is almost impossible to do if an individual private investor manages a relatively small portfolio of securities.
b) Investment banks, acting as underwriters and/or organizers of the issue, guarantee issuers the placement of securities and maintaining their liquidity within a specified period of time, thereby they assume the risks associated with the "non-placement" of issue-grade securities.
c) Investment banks, acting as underwriters, guarantee the value of issued securities with their reputation, thereby reducing some non-systemic risks for potential investors that arise when buying securities of certain issuers. Basically, investment banks
act as "delegated controllers", making up for the incompleteness of information from investors.
Reducing distribution costs: investment banks, as financial intermediaries, help reduce distribution costs (their own and their clients) by specializing in certain process of issuing securities, attracting financial resources of creditors who go to purchase borrowers' securities. Thus, there is an overflow, a movement of money resources from those who have money to those who need it.
b) Investment banks themselves can increase the size cash funds, since they also release their own debt types to the market financial transactions(investment boutiques), due to the wide scope of its activities (large investment banks), due to the presence of consulting and analytical departments as part of an investment bank, and so on.
Thus, due to the implementation of all the above sub-functions, investment banks have developed such a mechanism of financial intermediation, through which the accumulation and redistribution of financial resources from the lender to the borrower occurs most efficiently.
However, investment banks perform another key macroeconomic function, which is to regulate segments of the financial market.
a) Acting as brokers (market makers), investment banks contribute to setting a fair price for certain financial instruments, maintaining the liquidity of these instruments (on the exchange or over-the-counter markets).
b) Acting as brokers/dealers (large sellers-buyers of financial instruments), investment banks are able to significantly influence the price of financial instruments (especially in thin markets). At the same time, investment banks must act "on an honest and fair basis in the interests of, first of all, their clients and make every effort to preserve the honest and fair nature of the market."
c) Acting as professional participants in the financial market, investment banks contribute to the maintenance of the market itself (exchange or over-the-counter), since the market exists only when there are sellers and buyers, that is, participants in the trade.
d) Acting as underwriters, issuers of their own corporate papers and "producers" of derivatives and structured instruments, investment banks create financial products that, having a certain liquidity, circulate and are traded on the stock market. That is, investment banks are producers of financial instruments.
Other, less significant and less important functions of an investment bank include the function of redistributing information, the function of turning wholesale securities into retail ones, and the function of creating an information market space.
The idea that investment banks are involved in the process of "redistribution of information" is reflected in both domestic and foreign sources. "Redistribution of information", according to D.S. Ulyanova, takes place in the process of preparing the issue of securities, when investment banks advise the issuer on all issues related to the issue of securities.
Foreign researchers interpret the issue of the redistribution of information by investment banks somewhat differently. They argue that financial markets cannot function effectively if valuable information will not reach those who need it. The information market space created by investment banks contributes to a smoother and more efficient flow of transactions related to information-sensitive securities. Investment banks are the core of the information space and act as intermediaries, agents, connecting those who are interested in buying information and those who are interested in selling it.
Another function of investment banks is called "the transformation of wholesale securities into retail." This happens when an investment bank buys a large block of corporate paper, issues its own paper in a lower denomination, and places it among its clients.
2.1 Models of investment banking systems
Foreign experience of organization by banks investment business shows that world practice knows two main models for building investment banking systems: segmented (American) and universal (German).
The specificity of these systems characterizes the different role of commercial banks.
The segmented system is characterized by a strict legislative separation of the areas of activity of credit institutions: banking operations (raising funds, issuing short-term loans) are separated from operations for the issuance and placement of securities and some other types of financial services. In turn, under the universal system, banks, in accordance with the law, can, without restrictions, perform a wider range of financial services than just banking.
The parallel development of the processes of universalization and specialization of the activities of banks has led to the formation of a new type of investment banks, the distinguishing features of which are: the global nature of their activities, the presence of significant free capital, a full range of diversified and integrated services, the creation of their own asset management business, retail operations with small and medium-sized clients through the development of powerful brokerage networks, merging with the insurance business. At the same time, the main characteristics of the market investment services become the concentration of capital and power in investment - banking blurring the lines between commercial and investment banks.
The delimitation of areas of activity between credit institutions was introduced in a number of countries after economic crisis 1929 - 1933 So, in Italy, according to the Banking Law of 1936. banks were specialized: banks were identified that deal only with short-term or only medium-term and long-term lending.
In the United States, banks, in accordance with the Banking Act of 1933. were divided into commercial and investment banks. In 1933 In the United States, the Glass-Steagall Act was passed, which for many years determined the "legal framework" for regulating the US financial services market. In accordance with this Law, commercial banks focused their activities on traditional banking operations, they were prohibited from dealing with securities, with the exception of operations with state federal or municipal securities. Investment banks carried out long-term investments, as well as transactions with securities. The law provided for a number of restrictions on the activities of commercial banks and investment companies. In particular, this Law established a very restrictive list of securities transactions that banks could carry out; banned the practice of creating branches of banks engaged in operations with securities, and for companies engaged in operations in the securities market - to carry out banking operations to raise funds for deposits, open and maintain customer accounts, make settlements, etc. types of banking operations; forbade directors, employees of investment companies to be simultaneously officials, directors, employees of banking companies.
However, at present, there is a tendency towards the universalization of banking operations. The need to find other ways to increase the profitability of banking operations was caused by increased competition between credit institutions, as well as the emergence of new opportunities in the context of the development of the financial market. The result of this search was a sharp increase in the number of operations carried out by the bank, as well as the development of forms of investment activity: financing of investment projects, leasing, managing a portfolio of customer investments, consulting services, etc. This circumstance was due to the relaxation of banking legislation, as well as the fact that in the implementation of its banks' activities circumvented the existing law. At the same time, a number of large banks have begun to implement leasing transactions, as well as to create leasing companies. The participation of banks in project financing has increased, in which banks independently prepare an investment project or provide advice to clients, pay project costs, and often banks become co-owners of shares
established enterprises.
The desire to universalize banking activities is inherent in the credit systems of all developed countries, but each of them has
their characteristic features.
Application of banking system universalization directly
for the unstable Russian economy is due to the fact that universal banks have more development opportunities. The organization of investment banks in Russia has a special importance, as the Russian economy needs long-term investments. In turn, within the framework of the universal model, the formation of investment banks is possible through the creation of investment institutions as subsidiaries of universal banks, as well as through the creation of specialized banks, whose activities will be carried out on the basis of state guarantees and benefits. At the same time, the degree of state participation is determined by a clear balance of all market mechanisms. In turn, the non-intervention of the state can have consequences in the form of a collapse domestic economy and the collapse of the banking sector.
Most countries, faced with the crisis of the banking system, managed to prevent its destruction by using funds state budget and government loans. An analysis of the banking systems of various countries at the same time indicates a parallel development of a trend towards increased specialization of the activities of commercial banks. Thus, in countries with a developed market economy, an important place is occupied by specialized banks, whose main activity is aimed at the implementation of investment projects.
On the other hand, in countries with a universal credit system banks finance various kinds of companies not only by providing long-term loans, but also by acquiring their shares and bonds. At the same time, investment banks, which mainly carry out operations at their own expense, have a greater need for capital than commercial banks engaged in traditional banking services.
It should also be noted that the success of investment banks mainly depends on the degree of formation of the securities market. Based on the foregoing, we can say that the allocation of investment banks as a special type of financial institution implies a high degree of development of the securities market.
As for the Russian banking sector, it shows signs of the German model of a universal commercial bank. At the same time, large banks have significant stakes in major industrial companies, which gives banks the opportunity to control the intended use of the loan, as well as the financial position of the company as a whole. This scheme can be observed in financial and industrial groups, where banks play a leading role in regulating financial flows and investment projects. However, under these circumstances, the universal model is associated with an increased risk in the bank's activities, since there is an interrelation of the risks connected with investment activity, and risks on settlement and credit operations of banks. At the same time, the activity of the bank to a certain extent depends on the condition of large customers, whose funds are involved in the turnover.
2.2 Main activities of investment banks
It should be noted that activities to attract funding for emerging markets usually described as investment banking. It goes without saying that the most simple definition investment bank will be as follows: an investment bank is a financial institution engaged in investment banking. However, this definition is not entirely accurate. It implicitly implies the specialization of this institution in investment banking. But you cannot specialize only in investment banking. The implementation of such activities is possible only within the framework of a truly universal institution, in which all other activities of an investment bank are sufficiently developed. Fundraising activities are impossible without well-organized and developed work in all other areas typical of an investment bank. Let us illustrate the impossibility of attracting financing without developed other areas. The bank decided to attract financial resources for its client by issuing the client's securities. Even the very first part of this work - the choice of a specific attraction instrument and its main parameters - he will not be able to carry out, since he will not know the market's attitude at the moment to certain instruments. Even if such a project has reached the stage of placement of securities, then at this stage it will stop. Investors will not buy securities, since no one convinced them that these securities are sufficiently reliable and profitable (and the bank will not be able to make a professional representation of its client due to the lack of analytical activities). In turn, brokers will not enter into transactions to purchase securities, since they do not know the seller, they have never worked with him.) It can be said that all other activities of an investment bank create the basis for the development of investment banking within this bank. On the other hand, investment banking is not only the most "prestigious" direction in the activities of an investment bank, but also the most profitable. Therefore, all large and ambitious companies in the securities market seek to receive funding projects (in other words, they seek to grow into an investment bank). In developed markets, investment banking activities are complemented by operations in the secondary securities market related to the provision of services for the restructuring of the client's business (mergers and acquisitions).
Investment banking services. In developed countries, investment banks provide their clients with the following services: to attract financial resources; business restructuring through mergers and acquisitions; brokerage; portfolio management; depository-custodial; providing advice to clients. To provide the above services, an investment bank develops several types of activities that can be divided into external (directed directly to the client and to counterparties that form services) and internal (creating the necessary prerequisites for the implementation of external activities). Now we can move on to the consideration of activities that bring profit, i.e. to the outside.
Proper investment banking. There are two main areas here: attracting funding; mergers and acquisitions. In addition, investment banks often actively trade controlling stakes in small and medium-sized corporations not on behalf of clients to restructure their business, but in order to obtain speculative profits. At the same time, during the period when an investment bank holds one or another controlling stake, it can carry out financial rehabilitation of this enterprise, optimization of the finances of this corporation, as well as other measures aimed at increasing the market value of this block. Such activity is being carried out quite widely at present by some Russian investment companies. Attracting financing most often implies a form of placement of the client's securities, however, options for raising financing through the creation of venture capital enterprises and the use of investment lending mechanisms are not excluded. This type of activity naturally breaks down into a number of more specific types of activity: financial consulting for a client who wants to raise financial resources by issuing securities; underwriting syndication, i.e. creation and management of syndicates of underwriters; promotion of the client's securities on financial markets; servicing the client's securities in the secondary market. Typically, within the framework of investment banking, such a direction as corporate financing is singled out, which implies the attraction of financing for corporate clients, i.e. assistance in attracting additional capital by corporations - clients of the investment bank. Currently, only a very small proportion of investment banks are involved in raising finance for governments and municipalities, so for most other investment banks, the terms "investment banking" and "corporate finance" are essentially the same. Mergers and acquisitions for an investment bank operating in a country with a developed financial market, quite often become the main area of income. Majority Russian enterprises and financial groups have not yet reached the level of development when there is a need for the services of an investment bank for mergers and acquisitions. In Russian conditions, mergers and acquisitions are often understood as operations with large blocks of shares. However, the activity of buying and selling individual enterprises is not identical to mergers and acquisitions. The activities of an investment bank during mergers and acquisitions can be divided into the following components: consulting activities to determine the best option for business restructuring; attracting financial resources for mergers and acquisitions; accumulation on the market of large blocks of shares at the request of the client (purchase of large blocks), sale of large blocks; restructuring of a separate company and sale of its parts; development and implementation of effective protection of the client against takeover.
Securities trading. We defined this type of activity as external due to the ability to directly sell brokerage services, i.e. services for buying and selling securities. At the same time, securities trading activities are also carried out as a tool to support investment banking activities (sales of placed securities) and asset management activities (purchases and sales of securities in the process of restructuring a securities portfolio). At the same time, in developed financial markets, securities trading is understood not just as the process of concluding securities purchase / sale transactions, but the implementation of complex trading and arbitrage strategies, consisting of both many simple purchase / sale transactions and more complex transactions. In Russia today, securities trading almost always means unrelated buy/sell transactions, and only rarely do large institutions use more complex transactions. The organization of securities trading within an investment bank or a large investment company is a separate area of business and science, which has its own complex patterns and technologies. This is the type of activity that is mastered by market participants in the first place. In most cases, large Russian market participants have fairly high-tech subdivisions involved in securities trading.
Asset Management. Asset management (or investment management) is aimed at managing both the investment bank's own funds and the management of portfolios formed at the expense of clients' funds. From the client's point of view, an investment bank can provide resource management services, for example in the UK bond market, resource management services in the US stock market, as well as in any other market or sector, group of markets. In this case, the client can either invest and withdraw money on any day by contacting the manager, or do it only on certain days, or use the stock exchange for these purposes. From the point of view of an investment bank, all the funds it manages are suppliers of financial resources to the overall portfolio of the investment bank, the structure of which is largely determined by the structure of the resources attracted through various funds. In addition to client resources, this portfolio also includes own funds. Managing this portfolio is called investment management. When managing investments, the recommendations of the analytical department of the bank are used. He also develops dynamic portfolio models that become targets for that part of the investment bank that carries out securities trading activities.
Depositary - custody activity. The essence of this activity is storage, guardianship, guardianship, accounting of clients' securities, storage and accounting of own securities and other financial assets. Legally, in most cases, this type of activity is outside the scope of a legal entity that performs the functions of an investment bank, but this necessary part of the activity is aimed at providing comprehensive services. Therefore, technologically, this type of activity becomes an obligatory element of the activity carried out by a universal investment bank. Analytical research and development of recommendations. This activity in itself, as a rule, does not bring profit. On the contrary, it has become one of the most expensive in investment banks. Therefore, this type of activity can be classified as intermediate between external and internal activities of an investment bank. Modern investment banks in countries with developed financial markets are spending more and more money on the development of their research teams. One can point to at least two reasons for the bankers' love of research. Research and recommendations provided to clients are a kind of "face" of an investment bank, indicating its capabilities and indicating the quality of services of this bank. The first step in attracting a client is to present your research, recommendations, market assessments, forecasts. High-quality research work is the basis of successful investment management and fundraising activities. The higher the quality of analytical work in an investment bank, the more profitable asset management, the greater the volume of attracted financial resources, and the conditions for attracting are more profitable. To perform external activities, the investment bank also develops internal activities that provide normal operating conditions for those units that carry out external activities and make a profit. The largest items of income of an investment bank include: income from the provision of services to attract financing; income from managing your own portfolio; income from the provision of client portfolio management services; brokerage income. An investment bank initially begins to manage its own funds (or funds of the founders).
3.1 Prospects for the work of investment banks in the securities market
The dominant segment of lending to the population will remain consumer loans, the range of which is very wide - from cars and sophisticated household appliances to medical and tourist services. However, consumer lending also needs to improve the infrastructure. Expanding the circle of borrowers, involving new social groups with lower incomes and property into it, increases the risks of lending, which means that it will require more attention to the analysis of the borrower.
An important prerequisite for this will be the work of the insurance system. bank deposits. There will be significant changes in investment processes and applied investment technologies:
Possibility of information and financial control for using investment resources an investor in real time, remote at any distance from the place of investment of resources;
Implementation of unified information standards for collateral mechanisms, financial statements, presentation of projects and programs, enterprises, regions and states in information systems;
Creation of an integrated investment infrastructure (banking, legislative, organizational) for servicing investments.
Development and implementation of integral mechanisms and technologies for managing investment processes.
The basis for integrating the mechanisms and tools of the investment market, in my opinion, will be information technology, which will form (together with organizational) the basis of the pyramid of management decisions. All the rest (organizational, investment, financial, legislative) acquire a subordinate character and will develop on the basis of the leading trends in the development of information. The latter will be characterized by the following features:
Unification of informational reflection and up-to-date support, a deep description of each object of investment and business, which makes it possible to obtain prompt reliable information about this object anywhere in the world;
Legislative provision of the reliability of information at any level, coordination of such provision by interstate multilateral agreements of all countries of the world community;
Organizational support of ongoing transactions in the markets of goods, finance, services and investments in the Internet environment, unification of elements of economic law of the countries of the world that ensure the security of such transactions;
Final transfer of financial and banking business support to the environment of information and virtual technologies;
The legal framework of the global investment market will also represent a harmonious, balanced, multi-level system of laws and regulations built on the basis of information technology.
The banking system of Russia should already finally decide on the ways of its development against the backdrop of growing competition from foreign banks. According to analysts, there will be a restructuring of the banking system, mergers and acquisitions in the financial sector of the economy. It is expected that this process will last 2-3 years, as a result of which only the largest and most competitive banks will remain on the market.
According to leading analysts, the following scenario for the development of the bond market is possible in the next year and a half. In the absence of drastic changes in market regulation, it can be expected that the number of issuers will increase and the volume of transactions will increase. There will be an extension of the terms of borrowing, expansion of the range of industries whose enterprises will resort to issuing bonds. By the end of next year, there will be a significant increase in the turnover of the secondary market.
Currently, the shares of many companies listed on the stock market are undervalued. General rule, which is developed by the world practice of functioning stock markets can be summarized as follows:
Legislative (and, first of all, international) acts should ensure the reliability of the provision of information about the investment market, projects and programs, investment applicants, production systems and enterprises, the fulfillment of obligations to investors, the provision of benefits and preferences to the latter for the period of resource development. Bills of the above direction should be a priority for consideration and adoption by our legislature.
On the basis of the main legislative acts and to ensure their functioning, an international regulatory framework, a unified system of accounting and reporting, an integral package of model legislative decisions should be created that allow the states of the world to quickly harmonize their legislative framework.
The development of investment institutions may be subject to the following changes and be determined by the following main trends:
First, investment institutions should increasingly focus on creating conditions for the penetration of foreign capital, creating favorable conditions for such penetration. We are talking about insurance of investment risks, taking into account the difference foreign exchange rates national currencies, long-term provision of investment resources, liquidity of collateral assets and guarantees provided. It is the organizational structures that implement the above functions that are the primary task of the near future for the subjects of the investment market.
Secondly, the development of investment tools will be carried out through information modeling of investment services and only then the alignment of the necessary (missing) of its material elements.
The organizational infrastructure of the investment market should allow the construction of financial multipliers, create the possibility of placing relatively cheap resources under the provision of various instruments and guarantees, the level of profitability, the level of investment risks. The investment infrastructure being created should be understandable and familiar to the investor, able to comprehensively serve the investor himself, his investment institution, and investment seekers.
International cooperation is one of the real ways to attract significant investment resources to the economies of states. At the same time, international cooperation closes that niche of the investment market that is not interesting for national and regional investment institutions - the niche of small projects.
Russian commercial banks will be significant investors in the ruble corporate bond market, while their share in this segment will decrease in the optimistic scenario (if corporate bond yields fall) and increase otherwise.
Prospects for the development of the corporate bond market at the level of our region will depend, first of all, on the nature of the economic policy, as well as from the investment activity of enterprises in need of additional financing.
The interest of commercial banks in issuing their own shares and placing them on open market can be explained by a number of factors. First of all, this is inflation, which constantly devalues the bank's own capital and at the same time causes a sharp increase in "unmanaged" deposits (balances on settlement accounts), which leads to violation of the standards Central Bank RF. Inflation deprives banks of the opportunity to attract long-term deposits, so for the implementation of relatively long-term investments banks in ever-increasing amounts must use their own capital. In addition, high quotes of bank shares are seen by banks as a way to strengthen their positions in the market, expand their sphere of influence and attract new customers.
At the same time, in the real conditions of the Russian economy, in which the securities market has not been popular lately, because. investors are not yet able to invest funds for a long time. But with the development of the securities market, the fall in inflation, one can hope that the structure of debt obligations of banks will change, and banks will issue more bonds. The advantage of bonds is that they can be used as a means of payment. The issue of a bond also requires the registration of a prospectus. That is, the information will be available to investors, and they will be able to choose the right priority areas for investment.
According to Rosstat (Table 1), in 2010 the Russian economy received 114.746 billion dollars of foreign investment, which is 40% more than in 2009. Of these: direct investment decreased by 13.2% and amounted to 13.810 billion dollars; the volume of portfolio investments amounted to 1.076 billion dollars (growth by 21.9%); other investments were received in the amount of 99.86 billion dollars (+53.3%).
3.2 Development of project financing (investment lending)
One of the most pressing problems economic development Russia is currently increasing investment activity, which requires the formation of an effective investment market. The complexity of its formation and the corresponding market economy The mechanism for financing investments lies in the fact that in the Russian economy the necessary market infrastructure is just beginning to take shape and develop, which ensures the free exchange of information between all business entities, there are no reliable and adapted tools for financing investment activities. One of these tools is project financing, which became widespread in the last decades of the 20th century and has been successfully used in many industries to implement large investment projects.
Due to the peculiarities of development and the current institutional environment, project financing in the form in which it is used by Western national and transnational corporations cannot be applied in Russia. A certain transformation of the approaches developed by foreign practice is necessary, and their adaptation to modern Russian conditions, the hallmark of which is instability, imperfection and incompleteness of information. The study and theoretical understanding of the developed developed countries approaches to the organization of project financing, combined with a scientific generalization of our own experience in the field of investment financing, can become the basis for the formation of an effective system of project financing.
Project financing - financing of investment projects, characterized by a special way of ensuring the return on investment, which is based on the investment qualities of the project itself, the income that the newly created or restructured enterprise will receive in the future.
The specific mechanism of project financing includes the analysis of technical and economic characteristics investment project and the assessment of risks associated with it, and the basis for the return on invested funds is the income of the project remaining after covering all costs.
A feature of this form of financing is also the possibility of combining various types of capital: banking, commercial, state, international. Unlike a traditional credit transaction, the risk can be dispersed between the participants of the investment project.
As sources of financing, funds from international financial markets, specialized export credit agencies, financial, investment, leasing and insurance companies, long-term loans from the International Bank for Reconstruction and Development, the International Finance Corporation, and the European Bank for Reconstruction and Development can be attracted. big banks, involved in the financing of investment projects, have specialized units for the organization, control and analysis of the implementation of projects.
Taking into account the importance of coordinating investment activities in Russia, the Federal Center for Project Finance has been created, the purpose of which is to effectively facilitate the attraction of financial resources, including external financing, and ensure the implementation of investment projects that have a priority for national economy character.
At the same time, existing legislation complicates the value-added implementation of projects. In particular, not regulated legal framework project financing in various market sectors: granting concessions and guarantees, insurance, consortium law, stock market, trust, leasing operations and etc.
The development of project finance in the country is hampered by an unfavorable investment climate, insufficient resources for large-scale financing of capital-intensive projects, low qualifications of project finance participants, and other factors that exacerbate project risks. Under the circumstances, solving the problem requires integrated approach taking into account the interests of various parties.
Important components of this approach are the strengthening of the role of state guarantees for project risk insurance, including the provision of guarantees to banks participating in the financing of investment projects and programs included in the system of state priorities, tax incentives for investment mechanisms, and the development of interbank cooperation in the field of joint lending to investment projects.
It is essential for the development of project financing to study the possibilities of adapting the experience of world practice to Russian conditions, including in the field of developing methodological approaches that ensure an increase in investment efficiency. Solving the problem of increasing the efficiency of investment (regardless of the specific form of investment) is closely related to the analysis of the investor's ability to mobilize own and borrowed sources, the investment attractiveness of the external environment, and the choice of investment objects in order to determine an acceptable level of risk while achieving the required return.
Conclusion
The concept of "investment bank" is characterized by private and general definitions. According to a private definition, an investment bank is a large financial institution that operates at the interstate, state (national) and regional levels and attracts direct cash investments in the real sector of the economy or the economy of a particular country and regulates their intended use. According to the general definition, an investment bank is a large productive financial institution engaged in financial intermediation and mobilization of financial resources in the financial market for the purpose of lending and long-term financing of business entities of various levels; regulating the turnover of financial instruments by creating new products and trading them on the exchange and over-the-counter markets.
The key functions of an investment bank are the intermediary function and the function of regulating financial market segments.
By carrying out financial intermediation, an investment bank implements several sub-functions at once, namely: accumulation and redistribution of funds, risk reduction through its diversification and reduction of distribution costs.
Other, less significant functions of an investment bank include the functions of redistributing information, turning wholesale securities into retail ones, and creating an information market space.
The role of a modern investment bank in the economy is as follows: to create a specific product that contributes to the increment of value and the total social product; be a structure-forming element of the financial market, streamlining and streamlining the turnover of certain financial instruments; contribute to ensuring the continuity of production and circulation of the product, to accelerate the reproduction process as a whole; to promote the creation of new branches of production, the speedy introduction of scientific and technological ideas and achievements into production, the re-equipment of existing branches of production with modern equipment and technologies.
Ideally, an investment bank provides a full range of services related to investments. He is engaged in raising funds for the development of production, mergers and acquisitions, restructuring of enterprises, searching for a strategic investor, trading in bonds and stocks, etc. The investment bank also manages the client's investment portfolio, conducts transactions on the stock market on behalf of the client, and also helps its client make the most correct decision in the client's activities in the stock market.
In world practice, it is customary to distinguish two main models of investment banking systems: segmented (American) and universal (German).
The above systems are based on the specific distribution financial risks. In the American system, risks are largely divided into commercial and investment risks and are held through the insurance procedure. In the German system, risk control is provided by universal commercial banks, which are at the same time the main subjects of the financial market.
Using American system satisfaction of the interests of industrial companies occurs mainly through the placement of securities in the financial market. In turn, long-term loans from commercial banks play a less significant role in financing. At the same time, the participation of banks in the ownership of various corporations is limited at the legislative level.
The German system is characterized by the predominance of the credit method, while the main method that provides effective use credit funds is the establishment by banks of control over borrowers through participation in its ownership.
Currently, there is a tendency towards the universalization of banking operations. The need to find other ways to increase the profitability of banking operations was caused by increased competition between credit institutions, as well as the emergence of new opportunities in the context of the development of the financial market. The result of this search was a sharp increase in the number of operations carried out by the bank, as well as the development of forms of investment activity: financing of investment projects, leasing, managing a portfolio of customer investments, consulting services, etc. This circumstance was due to the relaxation of banking legislation, as well as the fact that in the implementation of its banks' activities circumvented the existing law. The participation of banks in project financing has expanded (financing of investment projects, characterized by a special way of ensuring the return of investments, which is based on the investment qualities of the project itself, the income that the newly created or restructured enterprise will receive in the future), in which banks independently prepare an investment project or provide consulting clients, pay the costs of the project, and often banks become co-owners of the shares of the enterprises being created.
The development of investment institutions will be subject to the following changes and be determined by the following main trends: globalization of the institutions themselves, their merger and internationalization, orientation towards creating conditions for the penetration of foreign capital, creating favorable conditions for such penetration, information modeling of investment services.
List of sources used
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Annex A
(reference)
Table 1 - The value and growth rates of investments in the Russian Federation
|
years |
Foreign investments - total (million dollars) |
Investments in fixed capital in the Russian Federation (million rubles) |
Growth rates compared to the previous year, % |
|
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The investment policy of commercial banks involves the formation of a system of targets for investment activity, the choice of the most effective ways to achieve them. In the organizational aspect, it acts as a set of measures for organizing and managing investment activities, aimed at ensuring optimal volumes and structure of investment assets, increasing their profitability with an acceptable level of risk. The most important interrelated elements of the investment policy are the tactical and strategic processes of managing the bank's investment activities.
Under the investment strategy understand the definition of long-term goals of investment activities and ways to achieve them. Its subsequent detailing is carried out in the course of tactical management of investment assets, including the development of operational goals for short-term periods and means for their implementation. The development of an investment strategy is thus the starting point of the investment management process. The formation of investment tactics takes place within the framework of the given directions of the investment strategy and is focused on their implementation in the current period.
It provides for determining the scope and composition of specific investment investments, development of measures for their implementation, and, if necessary, drawing up a model for making managerial decisions on exiting an investment project and specific mechanisms for implementing these decisions.
Banks, buying certain types of securities, seek to achieve certain goals, the main of which include:
Investment security refers to the invulnerability of investments from various shocks in the stock market, the stability of income and liquidity. Security is always achieved at the expense of profitability and investment growth. The optimal combination of security and profitability is achieved by careful selection and constant revision of the investment portfolio.
The main principles of effective investment activity of banks are:
The investment portfolio of a commercial bank usually consists of various securities issued by the federal government, municipalities and large corporations.
To assess the feasibility of acquiring certain securities, there are two main professional approaches, most large commercial banks carry out both fundamental analysis, as well as technical.
Fundamental analysis covers the study of the activities of industries and companies, analysis financial condition company, management and competitiveness. It consists of industry analysis and company analysis. In an industry analysis, the bank determines the industries that are of greatest interest to it, and then the leading companies are identified in these industries, and among them the company whose shares it is advisable to purchase is selected.
Technical experts are based on the study of exchange (or off-exchange) statistics; analyze the change in supply and demand, the movement of stock prices, the volumes, trends and structure of stock markets on the basis of diagrams and graphs, predict the possible impact of the situation on the market on the demand and supply of securities. The analysis of companies is divided into quantitative and qualitative.
Qualitative analysis is an analysis of the effectiveness of company management; quantitative - studies of various kinds of relative indicators obtained by comparing individual articles financial report companies.
Comparisons are made with similar enterprises and industry average data of the main absolute indicators of its activities (sales volume, gross and net profit), the study of changes and return on sales and return on equity, in net income per share and the amount of dividend paid on shares. Investment securities generate income for commercial banks in the form of interest income, commissions for the provision of investment services, and market value growth.
World experience has not developed an unambiguous approach to the problem of using banks' own funds when acquiring shares of other legal entities: in some countries, the participation of banks in the capital of other structures is not limited (Germany), in some countries it is strictly prohibited (USA, Canada). The Bank of Russia has chosen an intermediate option for regulating this area - the Central Bank of the Russian Federation can control the work of the bank, but is not empowered to interfere in the activities of other business entities that are not credit organizations, and therefore unable to determine the degree of commercial risk.
The main risks in investing are associated with the possibility of: loss of all or a certain part of the invested funds; · depreciation of the means placed in securities at growth of inflation; non-payment in full or in part of the expected return on invested funds; Delays in earning income · Emergence of problems with re-registration of ownership of acquired securities.
After determining the investment objectives and types of securities to purchase, banks choose a portfolio management strategy. According to the methods of conducting operations, strategies are divided into active and passive.
All active strategies are based on forecasting the situation in various sectors of the financial market and the active use by banking specialists of forecasts for adjusting the securities portfolio. Passive strategies use the forecast for the future to a lesser extent. A popular approach in such management practices is indexing, i.e. securities for the portfolio are selected based on the fact that the return on investment must correspond to a certain index and have a uniform distribution of investments between issues of different maturity. At the same time, long-term securities provide the bank with higher income, and short-term securities provide liquidity. A real portfolio strategy combines elements of both active and passive management.
The most important reason for the significant increase in bank investment in securities is that relatively high level income on them, less risk and high liquidity in comparison with credit operations.
The most important characteristic of the forms and types of banking investments is their evaluation from the standpoint of a combined investment criterion, the so-called magic triangle "profitability-risk-liquidity", which reflects the inconsistency of investment goals and requirements for investment values.
Banks work mainly not on their own, but on attracted and borrowed resources, so they cannot risk their clients' funds by investing them in large investment projects, if this is not secured by appropriate guarantees. In this regard, when developing their investment policy, commercial banks should always proceed from real risk assessments, economic efficiency, financial attractiveness of investment projects, the optimal combination of short, medium and long-term investments. At the same time, the existing investment system is not only an internal affair of the bank itself. In accordance with the basic principles of banking regulation, an integral part of any supervisory system is an independent review of the bank's policies, operations and procedures related to the issuance of loans and capital investment, as well as the ongoing management of the loan and investment portfolios.
Consequently, commercial banks must clearly work out and formally fix the most important activities related to the organization and management of investment activities. In essence, it is about the development and implementation of a sound investment policy. The development of the bank's investment policy is a rather complicated process, which is due to the following circumstances. First of all, due to the duration of investment activity, it should be carried out on the basis of a thorough prospective analysis, forecasting of external conditions (state macroeconomic environment and investment climate, investment market conditions and its individual segments, features of taxation and state regulation of banking activities) and internal conditions (volume and structure of the resource base of the market, the stage of its life cycle, goals and objectives of development, the relative profitability of various assets, taking into account risk and liquidity factors, etc.), the probabilistic nature of which makes it difficult to form an investment policy.
In addition, the definition of the main directions of investment activity is associated with large-scale problems of research and evaluation of alternative options for invested decisions, the development of an optimal model from the standpoint of profitability, liquidity and risk investment development. The development of an investment policy is significantly complicated by the variability of the external environment of banks, which determines the need for periodic adjustment of investment policy, taking into account predicted changes and developing a system for prompt response. Therefore, the formation of the investment policy of banks is associated with significant difficulties, even in a steadily developing economy.
A prerequisite for the formation of investment policy is the general business policy of the bank's development, the main objectives of which are priority in the development of strategic objectives of investment activity. Representing an important component of the overall economic policy, the investment policy is a factor in ensuring the effective development of the bank.
The main goal of the investment activity of the bank can be formulated as an increase in the income of investment activity with an acceptable level of investment risk. In addition to the general goal, the development of an investment policy in accordance with the economic development strategy chosen by the bank provides for taking into account specific goals, which are:
Determining the best ways to implement the strategic goals of investment activity involves the development of the main directions of investment policy and the establishment of principles for the formation of sources of investment financing. In accordance with these criteria, the following areas of investment policy can be distinguished:
Orientation to one of the above directions is a key link in the formation of investment policy, which determines the composition of investment objects, the source of income, the level of acceptable risk and approaches to investment analysis.
When the investment policy is oriented towards capital growth, the stability of the increase in the market value of investment assets comes to the fore, and their profitability is considered only as one of the factors determining the value of assets.
A policy aimed at capital growth is associated with investing in investment objects, which are characterized by an increased degree of risk due to the possibility of depreciation of their value. An increase in the market value of investment objects can occur both as a result of an improvement in their investment qualities and short-term fluctuations in market conditions. At the same time, the role of the speculative component increases.
Features of this type of investment policy determine the strengthening of the role of prospective aspects of analysis compared to retrospective and current analysis in making investment decisions.
The choice of the direction under consideration as a priority is typical for an aggressive investment policy, the purpose of which is to achieve high efficiency of each investment operation, to maximize income in the form of the difference between the price and acquisition of an asset and its subsequent value with a limited investment period.
In the practice of banking activities, the directions of investment policy can be combined in various forms, which, as a rule, make it possible to strengthen the advantages and mitigate the disadvantages. A variant of such a combination is a moderate investment policy, in which the preference is for a sufficient amount of income in the form of both current payments and capital growth with an investment period not limited by strict limits and moderate risk.
The development of an investment policy involves not only the choice of investment directions, but also taking into account a number of restrictions associated with the need to ensure a balance in the investment investments of a commercial bank. Goals and limits are set by legislative and regulations monetary authorities, as well as the management bodies of banks.
The Central Bank of the Russian Federation regulates the investment activities of commercial banks, defining priority investment objects and limiting risks by establishing a number of economic standards (the use of bank resources to acquire shares, issue loans, reserve for the depreciation of securities, bad loans), differentiated risk assessments for investments in various types of assets.
The organization of the investment policy in the bank involves the development of internal guidance documents that fix the basic principles and provisions of the investment policy. The experience of banking practice testifies to the expediency of formulating an investment policy in the form of an investment program.
Reflecting the goals of investment, the investment program determines the main directions of investments and sources of their financing, mechanisms for making and implementing investment decisions, the most important characteristics of investment assets: profitability, liquidity and risk, their ratio in the formation of the optimal structure of investment investments.
The limit of acceptable risk is the weighted average cost of attracting investment resources. Having established the preferred forms of income during the development of the main directions of investment, the investor determines the share of each form in total income from investments.
Management of investment activities provides for the analysis of the structure of assets to bring them in line with the structure of investment resources and ensure the required level of liquidity. The liquidity of investment assets should be associated with the nature of the liabilities that are the source of their financing.
