Research Paper Investment Banking
Investment Banking
Centuries have passed since ‘Investment Banking ' was first introduced to the world 's financial system. The fascination of making profit through newly created financial innovations, rather than basically depositing money in commercial banks in hope that the interest rate would not be reduced is truly a smokescreen.
What is an Investment Bank?
An investment bank operates differently. An investment bank does not have an inventory of cash deposits to lend as a commercial bank does. An investment bank is a financial institution that engages in the issuance of securities on behalf of its client. An investment bank acts as an intermediary, and matches sellers of stocks and bonds with buyers of stocks and bonds. Investment banks are the banks, which facilitate both the investor, who is in search for good investment opportunity and the investee, who is searching for capital to invest in practical projects. Unlike other types of banks, investment banks do not accept deposits from customers; that is, investment banks do not provide regular banking services to the general public. The main investment banking activities are issuance of securities, underwriting of securities, providing financial related consultancy services to companies, assisting companies in the acquisition and mergers, and similar services. A few of the world renowned investment banks are JP Morgan, Bank of America, Merrill Lynch, Goldman Sachs, Morgan Stanley, and Credit Suisse.
Companies use investment banks toward the same end as they use commercial banks. If a company needs capital, it may get a loan from a bank, or it may ask an investment bank to sell equity or debt (stocks or bonds). Because commercial banks already have funds available from their depositors and an investment bank typically does not, an investment bank must spend considerable time finding investors in order to obtain capital for its client. As investment banks are increasingly seeking to become "one-stop"
Centuries have passed since ‘Investment Banking ' was first introduced to the world 's financial system. The fascination of making profit through newly created financial innovations, rather than basically depositing money in commercial banks in hope that the interest rate would not be reduced is truly a smokescreen.
What is an Investment Bank?
An investment bank operates differently. An investment bank does not have an inventory of cash deposits to lend as a commercial bank does. An investment bank is a financial institution that engages in the issuance of securities on behalf of its client. An investment bank acts as an intermediary, and matches sellers of stocks and bonds with buyers of stocks and bonds. Investment banks are the banks, which facilitate both the investor, who is in search for good investment opportunity and the investee, who is searching for capital to invest in practical projects. Unlike other types of banks, investment banks do not accept deposits from customers; that is, investment banks do not provide regular banking services to the general public. The main investment banking activities are issuance of securities, underwriting of securities, providing financial related consultancy services to companies, assisting companies in the acquisition and mergers, and similar services. A few of the world renowned investment banks are JP Morgan, Bank of America, Merrill Lynch, Goldman Sachs, Morgan Stanley, and Credit Suisse.
Companies use investment banks toward the same end as they use commercial banks. If a company needs capital, it may get a loan from a bank, or it may ask an investment bank to sell equity or debt (stocks or bonds). Because commercial banks already have funds available from their depositors and an investment bank typically does not, an investment bank must spend considerable time finding investors in order to obtain capital for its client. As investment banks are increasingly seeking to become "one-stop"
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