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
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.