CHALLENGES IN INVESTMENT BANKING

Some of the challenges in the Investment Banking business are in existence due to the reason that the in 1990s broking firms, credit rating and other financial services firms are owned by the Investment Bankers. Hence, due to reasons of losing the other businesses from the company they may not be so fair in assigning the credit rating to the company concerned. Further in order to keep the favorable perception of new stock in post issue they might sell the shares (holding on behalf of their client) in the market

Pricing in new issue is a big challenge for an investment banker as it should not only result in fair pricing but should be a win-win situation for both the investor as well as the company. 

Valuation of shares for the exchange is another big challenge for the investment banker as it should be acceptable to both the companies involved in the process. 

In new issue management compliance of various related law is a challenge for investment banker as any lapse at stage can bring the whole effort to a zero level and invite regulatory penalties.