How Investment Banking is done in Pakistan.

1. Investment Banking in Pakistan
History:
• Began full scale development in the 1980s
• Continued to flourish until the mid-1990s, primarily driven by favorable economic conditions, a
stock market boom and financial liberalization measures.
Role in Economic Development:
• Vital for economic development through their impact on Money and Capital markets
• Promotes and facilitates investors which reigns in economic stability
Total investment banks in Pakistan as of 2023:
• Currently 9-10 following the mid-90s due to many banks failing or consolidatng.

2. Services offered and challenges in Pakistan
Services Offered:
1. Financial Facilities
2. Project Financing
3. Brokerage
4. Portfolio Management and Advisory Services.
Challanges Faced in Pakistan by Investment Banks:
• Structural issues including lack of diversfication, expertise, innovation and stable funds.
• Competition from Commercial Banks which began providing similar services to investment banks
• Limited Public Awareness and Trust regarding investment banking .

3. History of Investment Banking in the U.S
History:
• Golden Age (1896-1929) dominated by JP Morgan and National City Bank strengthened the
financial market and made it sustainable.
• Glass-Steagal Act(1933-1998): Separated Investment and Commercial Banking through strict
restrictions on what each type was allowed to do.
• Gramm-Leach-Bliley Act(1999): Repealed the restrictions introduced in the Glass-Steagal Act
pertaining to mixing of banking with securities and insurance businesses leading to a return to
broad banking.

4. Investment Banks in U.S
Total Investment Banks in U.S:
Categorized into three types:
• Investment Banks including (Bank of America and JP Morgan), Financial Conglomerates such as
(Bank of China), Private Investment Banks including (Allen & Company and CITIC Securities)
Total U.S Banking Population:
• Approximately 107.9 million households are fully banked in the U.S
Services Provided by U.S Investment Banks:
1. Private Placements
2. Asset and Risk Management services
3. Prime Brokerage

5. Differences between U.S and Pakistan
Economic Scale:
• U.S has a Massive and Diverse Economy capable of facilitating the Investment Banking sector
• Pakistan has a smaller and diversified economy unable to support continuous growth of the sector
Financial Market Sophistication:
• U.S financial markets are innovative and are highly liquid facilitating investment banking.
• Pakistan conversely has a developing financial market that is neither innovative nor very liquid.
Regulatory Framework:
• U.S has a comprehensive and robust framework one which ensures investor safety and economic stability.
• Pakistan has an evolving regulatory framework not quite as robust .
Access to Capital
• The U.S has an overabundance of Capital to support its financial markets.
• Pakistan is currently struggling with procuring access to long term funds.

6. Why do U.S Investment Banks perform well
• A large and diverse economy ensures a varied clientele.
• Their financial markets such as NYSE and NASDAQ are highly innovative and
liquid.
• New York acts as one of several Global Financial Hubs within the U.S facilitating
networking and collaborations across the financial sector.
• U.S investment banks lead in innovation and financial technology providing a
variety of services.
• A wide ranging talent pool is attracted to the U.S providing highly skilled
employees.
• The U.S has political and economic stability, augmenting investor confidence.