ABSTRACT
Studies of financial services firms as multinationals 2 have traditionally concentrated on commercial banking with little attention being paid to investment banks. One possible reason for this relative lack of academic interest is that this industry sector has traditionally been organized through private partnerships, which are secretive about their operations compared with manufacturing companies or commercial banks. In contrast with commercial banks, which started to become joint stock companies around 1860, it was not until 1960 that investment banks started to become public companies. A second reason is that the size of the whole industry in the United States in terms of capital employed has until recently been less than that of any one of the largest US commercial banks. This is because commercial banks employ their own equity, debt and deposits to enable them to act as principals in their transactions with lenders and borrowers, while investment banks have traditionally acted as brokers. A third reason is that only in the 1980s has the securities industry come to the attention of the world outside Wall Street and the City of London, mainly as a result of the extent to which securities market transactions during this period have substituted for the deposit and loan transactions of commercial banks.
