Investment Banks

Páginas: 3 (602 palabras) Publicado: 3 de noviembre de 2012
CHAPTER III
NON-BANK FINANCIAL INSTITUTIONS

3.2 Investment banks and merchant banks
They are specialist providers of financial and advisory services to corporate and government clients.
Theassets of these banks are mainly in the form of loans to corporation and government, often short-term. They are primarily concerned with wholesale finance.
Their principal income is fee incomeassociated with their off-balance sheet activities, such as providing advice to corporate clients, evaluating mergers and acquisitions, provision of risk management products...
The chapter focus mainly onthree areas of finance of these kind of banks:
- Mergers and acquisitions
- Project and structured finance
- Securitization
Mergers and acquisitions refers to a takeover company that seeks togain control over a tarjet company. The takeover can be horizontal (same type of business), vertical (within a related business), conglomerate (business area unrelated), hostile (actively resisted by thetarjet company).
Project finance refers to lending for large projects where loan repayments are based on projected cash flows. The lender trust the project cash flows for loan repayments.Structured finance refers to funding provided for major infrastructure projects.
Securitisation is the conversion of non-liquid assets into new asset-backed securities that are then serviced with cash flowsfrom the original assets.

3.3 Insurance policies
Life insurance policies provide a named beneficiary financial recompense in the event of the death of the policyholder or the occurrence of otherdefined event.
House insurance provides financial protection to the insured in the event of loss or damage to a house.
A motor vehicle policy covers damage to the named vehicle , plus damage to anythird party vehicles and property.
3.5 Superannuation funds
Savings accumulated, by an individual, to fund his or her retirement.
3.6 Finance companies and general financers
Rise funds in the debt...
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