The term merchant banking is easier to understand than to define because one can only make an attempt to identify the services and activities coming within its purview. Very commonly, the merchant banking has been defined as to what a merchant banker does.
As stated by Sir Edward Reid, the term merchant bank is sometimes applied to banks who are not merchants, sometimes to merchants who are not banks, and sometimes to houses who are neither merchants nor banks.
According to Michael T. Skully, “Merchant banking within the same country may cover wide range of financial activities and in process include a number of different financial institutions.”
John Dick was of the view that due to the dynamic nature of functions of merchant banks, the meaning and definition of merchant banking has been changing. He has stated, “of its very nature as merchant banking is always evolving the definitions supplied today would perhaps not be the same as they were three or four years ago.
It is not necessary that merchant banker should do all activities associated with a merchant banker. One merchant banker may specialize in one activity only, and take up other activities also, which may be complementary, supportive or specialized activity. Merchant banks are known as “Accepting and issuing houses” in UK and as “Investment banks” in USA. However, the services provided by these institutions differ from country to country.
(CMA DECEMBER, 2012 EXAMINATION)
As stated by Sir Edward Reid, the term merchant bank is sometimes applied to banks who are not merchants, sometimes to merchants who are not banks, and sometimes to houses who are neither merchants nor banks.
According to Michael T. Skully, “Merchant banking within the same country may cover wide range of financial activities and in process include a number of different financial institutions.”
John Dick was of the view that due to the dynamic nature of functions of merchant banks, the meaning and definition of merchant banking has been changing. He has stated, “of its very nature as merchant banking is always evolving the definitions supplied today would perhaps not be the same as they were three or four years ago.
It is not necessary that merchant banker should do all activities associated with a merchant banker. One merchant banker may specialize in one activity only, and take up other activities also, which may be complementary, supportive or specialized activity. Merchant banks are known as “Accepting and issuing houses” in UK and as “Investment banks” in USA. However, the services provided by these institutions differ from country to country.
(CMA DECEMBER, 2012 EXAMINATION)
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