Abstract:
In an extension of the research describing the phenomenon of poor performance of Investment banking sector in Pakistan, the present study highlights the problems faced by the investment banking sector, the reasons for the poor performance and recommendations for improvement. The regulation for increase paid-up requirement was a problem for most banks to acquire, who in turn opted for mergers to improve the banks condition. Overlapping of functions of investment bank s and commercial banks was found to be of significant importance causing stunted growth in the sector. High tax rate, cost of funds, limited availability were all areas that need due consideration. Performance of the Investment banks directly relates to economy of the country and performance of the stock market. External factors such as the Iraq war and September 11 incident were also found to have heavy effect on the performance of the sector. Recommendations highlighted and give guidelines for research in the new area of study including the effect of mergers of investment banks in Pakistan.
