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Bankin

  • Date Submitted: 01/27/2012 11:10 PM
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INTRODUCTION & DEFINITION

Investment Banks help companies and governments raise money by issuing and selling securities in the capital markets (both equity and debt), as well as providing advice on transactions such as mergers and acquisitions. Until the late 1980s, the United States and Canada maintained a separation between investment banking and commercial banks.
Definition
Division of banking encompassing business entities dealing with the creation of capital for the companies, in addition to acting as agents or underwriters for companies in the process of issuing securities, investment banks also advise companies on matter related to the issue & placement of Investment Banking.
A majority of investment banks offer strategic advisory services for mergers, acquisitions, divestiture or other financial services for clients, such as the trading of derivatives, fixed income, foreign exchange, commodity, and equity securities.
Trading securities for cash or securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is referred to as the "sell side."
Dealing with the pension funds, mutual funds, hedge funds, and the investing public who consume the products and services of the sell-side in order to maximize their return on investment constitutes the "buy side". Many firms have buy and sell side components
An investment bank is different from your traditional bank down the street in the sense that it does not keep any deposits with itself to pay you an interest nor does it guarantees the "safekeeping" of your money.

An investment bank is more specialized organization that takes in your money and after analyzing the possible risks and economic conditions gives you advice to convert it into more money. The services provided by Investment Banks takes many forms: securities underwriting, stock and bond trading, facilitating mergers and acquisitions, arranging and funding syndicated loans and...

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