Investment Banking
Content
Investment banking
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v•d•e
An investment bank is a financial institution that assists corporations and governments in raising capital by underwriting and acting as the agent in the issuance of securities. An investment bank also assists companies involved in mergers and acquisitions, derivatives, etc. Further it provides ancillary services such as market making and the trading of derivatives, fixed income instruments, foreign exchange, commodity, and equity securities. Unlike commercial banks and retail banks, investment banks do not take deposits. To provide investment banking services in the United States an advisor must be a licensed brokerdealer. The advisor is subject to Securities & Exchange Commission (SEC) (FINRA) regulation.[1] Until 1999, the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G8 countries, have not maintained this separation historically. Trading securities for cash or for other securities (i.e., facilitating transactions, marketmaking), or the promotion of securities (i.e., underwriting, research, etc.) was 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.
Contents
[hide]
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1 Organiz ational structur e of an investm ent bank • 1 . 1 M a i n a c t i v i t i e s
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2 Core investm ent banking activitie s • 2 . 1 F r o n t o f
[edit] Organizational structure of an investment bank
[edit] Main activities
An investment bank is split into the so-called front office, middle office, and back office. While large full-service investment banks offer all of the lines of businesses, both sell side and buy side, smaller sell side investment firms such as boutique investment banks and small broker-dealers will focus on investment banking and sales/trading/research, respectively. Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities in the market. To the investor, the responsible investment banker offers protection against unsafe securities. The offering of a few bad issues can cause serious loss to its reputation, and hence loss of business. Therefore, investment bankers play a very important role in issuing new security offerings.
[edit] Core investment banking activities
From Wikipedia, the free encyclopedia
Jump to: navigation, search Banking Types of bank Central bank Advising bank Commercial bank Community development bank Credit union Custodian bank Depository bank German public bank Investment bank Industrial bank Islamic banking Merchant bank Mutual bank Mutual savings bank National bank Offshore bank Private bank Savings bank Swiss bank Deposit accounts Savings account Transactional account Money market account Time deposit ATM card Debit card Credit card Electronic funds transfer Automated Clearing House Electronic bill payment
Giro Wire transfer Banking terms Anonymous banking Automatic teller machine Loan Money creation Substitute check List of banks
Finance series Financial market Financial market participants Corporate finance Personal finance Public finance Banks and Banking Financial regulation
v•d•e
An investment bank is a financial institution that assists corporations and governments in raising capital by underwriting and acting as the agent in the issuance of securities. An investment bank also assists companies involved in mergers and acquisitions, derivatives, etc. Further it provides ancillary services such as market making and the trading of derivatives, fixed income instruments, foreign exchange, commodity, and equity securities. Unlike commercial banks and retail banks, investment banks do not take deposits. To provide investment banking services in the United States an advisor must be a licensed brokerdealer. The advisor is subject to Securities & Exchange Commission (SEC) (FINRA) regulation.[1] Until 1999, the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G8 countries, have not maintained this separation historically. Trading securities for cash or for other securities (i.e., facilitating transactions, marketmaking), or the promotion of securities (i.e., underwriting, research, etc.) was 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.
Contents
[hide]
•
1 Organiz ational structur e of an investm ent bank • 1 . 1 M a i n a c t i v i t i e s
•
2 Core investm ent banking activitie s • 2 . 1 F r o n t o f
[edit] Organizational structure of an investment bank
[edit] Main activities
An investment bank is split into the so-called front office, middle office, and back office. While large full-service investment banks offer all of the lines of businesses, both sell side and buy side, smaller sell side investment firms such as boutique investment banks and small broker-dealers will focus on investment banking and sales/trading/research, respectively. Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities in the market. To the investor, the responsible investment banker offers protection against unsafe securities. The offering of a few bad issues can cause serious loss to its reputation, and hence loss of business. Therefore, investment bankers play a very important role in issuing new security offerings.
[edit] Core investment banking activities
