An Inside Look at Investment Banking

An Inside Look at Investment Banking

I. Background

II. Introduction

III. Basic Functions

a. Analysis

b. Underwriting

c. Selling

IV. Organizational Structure:

a. Front Office

b. Middle Office

c. Back Office

V. Prospects of Industry

a. Top 10 Investment Banks

b. Statistics

VI. Works Cited

History

Investment banking has had a long history within the United States. The first exercised forms of investment banking were conducted by banking firms in the early 1800s. These early firms also took deposits unlike modern investment banks. As the 19th century progressed so did our country's demand for capital. More modern forms of investment banks started to appear during the civil war era founded by financiers like Jay Cooke of Jay Cooke and Company in Philadelphia. Many of which played a crucial role in raising capital for the war. Other banks that were founded during this time period include Goldman Sachs, Lehman brothers and Salomon Brothers. Today investment banks still play a critical role in our society, specifically in capital markets by expediting the movement of financial resources.

Introduction

Fundamentally, an investment bank is a financial institution that assists people, corporations and governments with raising capital. In the field of finance, it's imperative to understand investment banks and their role in the industry. In addition, as the world economy continues to globalize, the finance industry will continue to grow and get more competitive. These investment banks play a major role in this global growth, in both developed and developing economies. This essay will discuss the functions, roles, organizational structure, and prospects of the modern investment banking industry.

Functions

Unlike traditional commercial and retail banks, investment banks do not accept deposits. Additionally, they offer services to both corporations who issue securities and investors interested in purchasing these securities. This puts them at both ends of the deal, which can be quite lucrative if executed properly. There are