Overview of Investment Banking

So recently I started to research investment Banking and I get to learn about a lot of things. I learned that Investment banking fuels economic growth facilitates capital raising, and drives corporate transactions. Investment banking plays a big role in connecting companies, governments, and investors to achieve their financial objectives. I also learned that investment banking revolves around Four functions: Capital Raising, Mergers and Acquisitions (M&A), Securities trading, and Financial Advisory. So basically in
Capital-raising:
Investment banks serve as the bridge between companies seeking funds and investors willing to provide capital. Through initial public offerings (IPOs), secondary offerings, or private placements, but I wasn't able to learn the role of investment bankers in depth, in short they make this whole process very smooth for companies as well as investors. By enabling companies to access capital, investment banking fuels entrepreneurship, job creation, and economic expansion.
Mergers and Acquisitions:
Investment banks act as trusted advisors in M&A transactions, providing guidance and financial advice. Their role includes identifying potential targets or buyers, valuing companies, structuring deals, and making negotiations. M&A activities enable companies to consolidate their operations, expand their market presence, and drive harmony.
Securities Trading:
Investment banks house dedicated trading desks that engage in buying and selling various securities on behalf of clients and for their own accounts. They facilitate trades in equities, commodities, foreign exchange, etc. with the help of their market knowledge, research capabilities, and risk management skills, investment banks provide liquidity to financial markets and play a vital role in price discovery and efficient capital allocation.
Financial Advisory:
Investment banks provide financial advisory services, offering strategic and financial consulting to clients. They assist in matters such as corporate restructuring, debt issuance, capital allocation, and corporate governance, providing expert guidance specific to their clients.
Investment banking also provides other services like Research, Asset Management, etc. But right now I haven't learned much about those.
Investment banking operates in a way to ensure transparency, fair practices, and the stability of financial markets. Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, Securities & Exchange Board of India (SEBI), and similar institutions globally, impose some standards on investment banks to maintain the integrity and smooth workflow of the financial system.
So I hope this article will help those who want to get an overview of Investment Banking

Thank you

 

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