ECON 252 (2011) - Lecture 19 - Investment Banks

Lecture 19 - Investment Banks

Overview

Professor Shiller characterizes investment banking by contrasting it to consulting, commercial banking, and securities trading. Then, in order to see the essence of investment banking, he reviews some of the principles that John Whitehead, the former chairman of Goldman Sachs, has formulated. These principles are the basis for a discussion of the substantial power that investment bankers have, and their role in society. Government regulation of these powerful investment banks has been a thorny issue for many years, and especially so now since they played a significant role in world financial crisis of the 2000s.

The second half of the lecture is a guest lecture by Jon Fougner, a former student in ECON 252 from a decade ago, who has since worked for Goldman Sachs and currently works for Facebook. Mr. Fougner discusses his experiences working at the junior level in investment banking and offers advice to current students about steps to take if they are considering investment banking as a career. Subsequently, he elaborates on his current role in the technology industry. In the concluding questions-and-answers session, he shares, among other topics, his views about a start-up initiative by Peter Thiel (a board member at Facebook) and compares the corporate cultures of Goldman Sachs and Facebook.

Resources

Assignment

Fabozzi, Foundations of Financial Markets, Ch. 13

Shiller, Finance and the Good Society, Ch. 8

Ellis, The Partnership, Ch. 11

Course Media

Transcript

html

Audio

mp3

Low Bandwidth Video

mov [100MB]

High Bandwidth Video

mov [500MB]