Over The Wall Analysis & Information in Details
Over The Wall Analysis
What does it mean to be “brought over the wall”? Generally, being “brought 翻墙,” is when an individual in an investment banking group who is not working directly with the investing customers is brought over to work specifically for the underwriter’s department to focus solely on that firm. For example, let’s say there are two guys – Jeff and Bobby. Jeff is an experienced investor who have produced winning investments in the past, but Bobby is relatively new to the investment banking industry and hasn’t much experience what so ever.
As the two men are walking down the street, Jeff spots a very interesting new business, probably one he’s had his eye on since he was a kid. The Chinese wall, as it’s known within the investment banking business, is basically an advertising tool meant to bring in new clients to an investment bank. In order for that business to gain approval from the overlying research department, they have to meet a certain set of criteria. If the business doesn’t meet those criteria, it’s likely that business won’t be approved to run through the Chinese wall.
So how do you know when you are coming across one of the walls that must be taken over? You basically have two sources of inside information. The first is the investment bank itself. That is, the underwriter is supposed to go by the investment bank’s internal policies as outlined by their charter. Secondly, there are reports that are sent up the ladder internally at all levels of the investment bank concerning their underwriting process standards.
Over The Wall Analysis & Information in Details
Usually what happens is that an investment bank research analyst, or the people in charge of the internal review of the business, will spot something that looks like a potential problem. The research analyst will then send up a wall map, or some sort of internal symbol on which to identify the potential problem. At least one person from the overlying underwriting department will read the map, and if the map is found to be defective, or incomplete, they will either change the symbols on the map to something else or take the appropriate action. The purpose is so that the overlying underwriting department can act more efficiently and not get stuck with something that really doesn’t affect their business.
The other source of inside information is the research department itself. In the early days of the Internet, this wasn’t always so efficient. Often, there were delays because the people who were responsible for making decisions about investment bank operations were too busy to go back and read all of the internal signals on the walls that were supposed to tell them whether or not something was suspicious. Today, though, there is an internal research team for just about every major bank, which handles the large majority of the walls that are examined internally by the investment bank.
The walls are covered with very complex mathematical symbols. All of these are designed to convey to the overlying underwriting department what all of the different internal signals mean. Sometimes, the investment bank may use its own internal research team to examine a certain wall. If the wall is suspect, the research analyst will make sure that all of the signs on that wall are correct, and then he or she will make a recommendation to the overlying underwriting department. While it is still possible for a wall to be incorrect, it is much less likely.