Investment Bank is a financial
intermediary that performs a variety of services. This includes underwriting,
acting as an intermediary between an issuer of securities and the investing
public, facilitating mergers and other corporate reorganizations, and also
acting as a broker for institutional clients.
Unlike commercial banks
and retail banks, investment banks do not take deposits. There are two main
lines of business in investment banking. Trading securities for cash or for
other securities (i.e., facilitating transactions, market-making), or the
promotion of securities (i.e., underwriting, research, etc.) is the "sell
side", while dealing with 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.
The role of the investment bank begins
with pre-underwriting counseling and continues after the distribution of
securities in the form of advice.
Investment Banker is a person
representing a financial institution that is in the business of raising capital
for corporations and municipalities.
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