Access over 20 million homework & study documents

Investment banks

Content type
User Generated
Rating
Showing Page:
1/7
Investment banks
Investment banks serve as the middleman between investors and corporations that need
capital to grow their business. These banks provide their services so that there can be a smooth
transfer of money and for the purpose, agreement operations running the way they are
supposed to. They do not offer the same range of services that full-service banks also known as
commercial banks do, such as Regions and Bank of America.
There are two camps involved in investment banks and how they work. One side is the
buy-side and the other is the sell-side. The sell-side deals with facilitating client transactions,
engaging in market-making services, placing bond issues, and selling shares of newly issued
Initial Public Offerings, or IPOs. On the other side, the buy-side has the goal of maximizing
returns when trading or investing in securities. They do this by investing in the public and
working with hedge funds, mutual funds, and pension funds.
Investment banks have been around for a long time but gained their popularity largely
during the end of the nineteenth century riding into the twentieth century. The oldest
investment banks originated as merchants trading through items such as silk, metal, and spices,
and commodity. The United Kingdom still today remains one of the largest financial centers in
the world and still using the term merchant banks instead of investment banks. The Great
Depression hit not long after investment banks made their way to the United States with major
consequences. A dramatic spike in stock prices triggered one of the worst financial crises in
history in 1929. This resulted in much more stringent regulations in the industry bringing about
the Glass-Steagall Act of 1933 which required separation in commercial and investment banks.

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/7
Investment banks mostly stayed on a steady increase excluding a few points in time but today,
this job field inspires a large interest from people to pursue through its success.
Although investment banks have had an immense amount of success, executives have also
contributed to the destruction of their respective firms in 2008 in the worst financial crisis since
the Great Depression. Many factors led to this crisis to occur all stemming from bank
executives. They began having poor underwriting practices as well as regulatory issues including
deregulation, lenient regulation, and in some cases a complete lack of regulating. There was a
subprime mortgage market that led to a drastic decrease in the prices of houses that lead to
foreclosures and delinquencies by people.
One of the two services investment banks offer is providing mergers and acquisitions
(M&A) advisors. M&A advisors provide institutes and corporations with the assistance of
completing business acquisitions. The banks use their resources and connections to give the
client networking and relationship opportunities to strike a deal. The process for mergers and
acquisitions is an extended process broken up into ten steps. The banks first form an acquisition
strategy to assess how they will be going about their business. They then review the acquisition
criteria to discover what the company or corporation has requested as their checklist for the
M&A. The bank proceeds with searching for a target followed by the acquisition planning to
follow through on their strategy. The bank will then decide on which target has the best value
and the best to offer to their client. Negotiation will then take place after evaluating and they
will then carry on with due diligence to ensure that the proper legal steps are taken. Next, the
bank will collaborate to form a purchase and sales contract to ensure that both sides follow

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/7

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 7 pages?
Access Now
Unformatted Attachment Preview
Investment banks Investment banks serve as the middleman between investors and corporations that need capital to grow their business. These banks provide their services so that there can be a smooth transfer of money and for the purpose, agreement operations running the way they are supposed to. They do not offer the same range of services that full-service banks also known as commercial banks do, such as Regions and Bank of America. There are two camps involved in investment banks and how they work. One side is the buy-side and the other is the sell-side. The sell-side deals with facilitating client transactions, engaging in market-making services, placing bond issues, and selling shares of newly issued Initial Public Offerings, or IPOs. On the other side, the buy-side has the goal of maximizing returns when trading or investing in securities. They do this by investing in the public and working with hedge funds, mutual funds, and pension funds. Investment banks have been around for a long time but gained their popularity largely during the end of the nineteenth century riding into the twentieth century. The oldest investment banks originated as merchants trading through items such as silk, metal, and spices, and commodity. The United Kingdom still today remains one of the largest financial centers in the world and still using the term merchant banks instead of investment banks. The Great Depression hit not long after investment banks made their way to the United States with ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
I was stuck on this subject and a friend recommended Studypool. I'm so glad I checked it out!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents