An investment bank is a financial institution that assists individuals, corporations, and governments in raising financial capital by underwriting or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services ( fixed income instruments, currencies, and commodities).
Unlike commercial banks and retail banks, investment banks do not take deposits. From the passage of Glass–Steagall Act in 1933 until its repeal in 1999 by the Gramm–Leach–Bliley Act, the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G7 countries, have historically not maintained such a separation. As part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act of 2010), the Volcker Rule asserts some institutional separations of investment banking services from commercial banking.
The two main lines of business in investment banking are called the sell side and the buy side. The " sell side" involves trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.). The " buy side" involves the provision of advice to institutions that buy investment services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge funds are the most common types of buy-side entities.
An investment bank can also be split into private and public functions with a Chinese wall separating the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas, such as stock analysis, deal with public information.
An advisor who provides investment banking services in the United States must be a licensed broker-dealer and subject to U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation.
Usage examples of "investment banking".
Indeed, the week earlier, Draper had given the correct number to his client Salomon Brothers, the US investment banking giant.
Though her forte was not cash and equivalents, treasury and agency securities, derivatives, investment banking, commercial and corporate banking, West knew enough to get a sense of what Mauney might have been intending on his travels.
I really liked Wallace then but he was into this whole investment banking thing and he couldn't handle the routine and he broke down, it was the acid not the cocaine that did it.
No investment banking infrastructure, no limited liability, all property rights ultimately devolve to the king—.
Erik was having an affair with his corner office and his mahogany desk at an investment banking firm in San Francisco and I was having an affair with the woman who came to do the stenciling in the nursery.
By the time Karl's messenger came looking for them, they were getting questions about mutual funds and investment banking that they weren't ready to answer.
Pilgrim was Hungarian by birth, a child refugee in 1956, had been a brilliant student in America, had had a brilliant career very young on Wall Street in investment banking, and was head now of an important international house.
He was just too tempted by all the tidbits Skiba was tossing his way and by the investment banking business Lampe gave Dixon.
Carol worked for an investment banking firm located in the financial area.
In investment banking the old conservative WASP grouping still lingers on.
Going outside the agency, he chose Beverly Wright, a Harvard MBA with a background in investment banking.