Investment Banks and Globalization Essay

1002 Words May 5th, 2009 5 Pages
“Global reach and local know how ' investment banks and globalization.”

“Investment banks are facing many challenges, not least the need to become global in scope and ambition, but local in understanding and execution”.

(Comments on the article by Anshu Jain, head of Deutsche Bank's Global Markets Division).

In the article the main though is represented by a statement that: “We cannot easily talk about alternatives to globalisation in investment banking; only of the different strategies for meeting its challenges”. According to the author, globalisation is rather mature phenomenon in the business. Globalising capital flows and ever more sophisticated financial instruments have created extraordinary challenges and opportunities
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As a solution, it will generate value by fostering connectivity between these locations; by taking products developed in global financial centres and tailoring them for distribution locally and vice versa.

But what about competition on the local markets? Is it that easy for a global player to win the race for a local transaction? And with ever growing competition and a shift to specialization will the giants be successful basing on their image and global position? In my opinion, the only way of remaining global and having local understanding and execution is to co-operate with a local firm, which often operates in a niche or specializes in a more narrow segment. Not only do they have the knowledge and understanding of the specificities of the local business but also employ local people. Even in the times of globalization, the human factor tends to play ever increasing role as differences in IT solutions, access to information or other fixed assets are less and less visible between the top players in the business. It is the employees and company’s culture that make the difference. And it is also important to add that in today’s world outside-business contacts can make you win a transaction even in the most transparent bidding process… The stakes are high thus it is worth every effort.

Another important matter which derives from globalization and was, for some reason, omitted in the article is the fact that after years of

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