This report looks at the operational risk associated with this industry. Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk).
This industry comprises investment banks and firms engaged in investment banking activities. These activities include equity and debt underwriting, and financial advisory services such as merger and acquisition and corporate finance activities. Investment banks also undertake trading for clients and trade on their own account (principal trading). Other activities may involve asset management, investment advice services, financing services and securities lending.
The primary activities of firms in this industry are:
- Corporate finance services
- Fixed interest, currency and commodity trading
- Merger and acquisition advisory services
- Principal trading
- Underwriting, originating and/or maintaining markets for issues of securities