Introduction Investment banking is often seen as glamorous but misunderstood. From facilitating billion-dollar mergers to helping governments raise funds, investment banks are central to financial ecosystems. Here’s a comprehensive breakdown of what investment banks do and how they impact the world.
1. What is Investment Banking? It involves advisory and capital-raising services for corporations, governments, and institutions. Not to be confused with retail or commercial banking.
2. Core Divisions
- M&A Advisory: Assisting companies in mergers and acquisitions
- Underwriting: Issuing new securities
- Trading & Brokerage: Market-making services
- Asset Management: Managing clients’ investments
3. Major Players
- Goldman Sachs
- JPMorgan Chase
- Morgan Stanley
- Barclays
4. IPO Example: Facebook (2012) Facebook raised $16 billion in its IPO, handled by top investment banks. Their role included pricing, underwriting, and marketing the offer.
5. How They Make Money
- Advisory fees
- Commissions
- Spread from trading activities
6. Skills Required
- Financial modeling
- Market analysis
- Negotiation
- High-stress tolerance
7. Challenges and Criticisms
- Long work hours
- Conflicts of interest
- Risky trading practices
8. Regulation and Compliance
- SEC (U.S.)
- FINRA
- MiFID (EU)
9. Career Opportunities
- Analyst
- Associate
- VP and Managing Director
10. Conclusion Investment banking is intense but offers unparalleled exposure to high-stakes finance. Whether you aim to work in the field or simply want to understand it better, it’s a fascinating and impactful industry.
NowGazer 
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