Agenda
                     Agenda
                     Industry Overview
                       Industry Overview
                     Market Dynamics
                       Market Dynamics
                     Risk Management 
                       Risk Management 
                       Environment
                       Environment
                     JP Morgan Chase
                       JP Morgan Chase
                     Merrill Lynch
                       Merrill Lynch
                     Bank of America
                       Bank of America
                     Recommendation
                       Recommendation
                                     
                                     
                   Definition of Money Center Bank
                   Definition of Money Center Bank
                     Money center bank: a large bank in a 
                       Money center bank: a large bank in a 
                       major financial center which borrows from 
                       major financial center which borrows from 
                       and lends to governments, corporations, 
                       and lends to governments, corporations, 
                       and other banks, rather than consumers
                       and other banks, rather than consumers
                     Market maker: a brokerage or bank that 
                       Market maker: a brokerage or bank that 
                       maintains a firm bid and ask price in a 
                       maintains a firm bid and ask price in a 
                       given security by standing ready, willing, 
                       given security by standing ready, willing, 
                       and able to buy or sell at publicly quoted 
                       and able to buy or sell at publicly quoted 
                       prices (from their own accounts)
                       prices (from their own accounts)
                                     
                                     
                    Products and Services
                     Products and Services
                     Personal banking 
                       Personal banking 
                     Business banking
                       Business banking
                     Investment banking – advisory, debt and 
                       Investment banking – advisory, debt and 
                       equity underwriting, market making, 
                       equity underwriting, market making, 
                       trading and investing of debts and 
                       trading and investing of debts and 
                       equities
                       equities
                     Treasury and Securities Services – cash 
                       Treasury and Securities Services – cash 
                       management, institutional trust services, 
                       management, institutional trust services, 
                       treasury services, clearing services
                       treasury services, clearing services
                     Investment management and private 
                       Investment management and private 
                       banking
                       banking
                     Private equity – venture capital
                       Private equity – venture capital
                                     
                                     
                      Market Dynamics
                      Market Dynamics
                                            U.S. Money 
                                            U.S. Money      Market 
                                                            Market 
                                            Center Banks
                                           Center Banks Capitalization
                      Global money                          Capitalization
                      Global money 
                      center banks 
                      center banks          Citigroup       246B
                                            Citigroup       246B
                   -  market 
                      market 
                      capitalization = 
                      capitalization =      Bank of         114B
                                            Bank of         114B
                      1,221B
                      1,221B                America
                                            America
                   -  ROE = 16.9%
                      ROE = 16.9%           Wells Fargo     95B
                                            Wells Fargo     95B
                                           JP Morgan       73B
                      Merrill Lynch         JP Morgan       73B
                      Merrill Lynch 
                                            Chase
                      (56B)                 Chase
                      (56B)
                                            Wachovia        61B
                                            Wachovia        61B
                                            US Bankcorp 52B
                                            US Bankcorp 52B
                                            Bank One        47B
                                            Bank One        47B
                                        
                                        
                     Important Regulations
                     Important Regulations
                      The Securities Exchange Act - 
                        The Securities Exchange Act - 
                        established the Securities and Exchange 
                        established the Securities and Exchange 
                        Commission (SEC) as the primary 
                        Commission (SEC) as the primary 
                        regulator of US securities markets, 
                        regulator of US securities markets, 
                        including investment banks as well as 
                        including investment banks as well as 
                        non-banks that broker and/or deal non-
                        non-banks that broker and/or deal non-
                        exempt securities
                        exempt securities
                      Financial Services Competition Act in 
                        Financial Services Competition Act in 
                        1999 permitted commercial banks to have 
                        1999 permitted commercial banks to have 
                        affiliated securities firms
                        affiliated securities firms
                      Bank of International Settlements - Basel 
                        Bank of International Settlements - Basel 
                        Capital Accord
                        Capital Accord
                      Financial Accounting Standards Board – 
                        Financial Accounting Standards Board – 
                        FASB Statement 133
                        FASB Statement 133