What are the Functions of Investment Banking?
In the following post, we’ll briefly break down the various divisions of an investment bank and the services performed, including the changes that have shaped the investment banking industry through the aftermath of the 2008 financial crisis.
Table of Contents
Investment Bank: Compilation of Learning Resources
Interested in learning about the functions of an investment bank?
Click on each link to view an informative article on the various tasks performed by an investment bank.
- Investment Banking Primer: Comprehensive guide to learn about the investment banking industry and the role of an investment banker.
- Raising Capital & Security Underwriting: Banks are middlemen between a company that wants to issue new securities and the buying public.
- Mergers & Acquisitions: Banks advise buyers and sellers on business valuation, negotiation, pricing and structuring of transactions, as well as procedure and implementation.
- Product Groups vs. Industry Groups: The front-office function of banks is separated into “buckets”, with the most common classification being product groups and industry coverage groups.
- Sales & Trading and Equity Research: Banks match buyers and sellers, as well as buy and sell securities out of their own account to facilitate the trading of securities.
- Retail and Commercial Banking: After the repeal of Glass-Steagall in 1999, investment banks now offer traditionally off-limits services like commercial banking.
- Front Office vs. Back Office: While the sexier functions like M&A advisory are “front office,” other functions like risk management, financial control, corporate treasury, corporate strategy, compliance, operations, and technology are critical back-office functions.
- History of the Investment Banking Industry: The industry has changed dramatically since John Pierpont Morgan had to personally bail out the United States from the Panic of 1907. We survey the important evolution in this section.
- Post-2008 Financial Crisis: The investment banking industry was shaken to the core during and after the financial crisis that gripped the world in 2008. How has the industry changed, and where is it going?
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