Investment Banking

Investment Advisory
August 30, 2016
Business Finance
August 30, 2016
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Investment Banking

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 (or both).

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

1933 (Glass–Steagall Act) until 1999 (Gramm–Leach–Bliley Act), the United States

maintained a separation between investment banking and commercial banks. Other

industrialized countries, including G8 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), Volcker Rule asserts full

institutional separation of investment banking services from commercial banking.