Investment Bank (IB)

Author:

Moneyzine Editor

1 mins

September 25th, 2023

Advertiser Disclosure

Definition

The term investment bank refers to a financial institution that provides a wide variety of complex services to individuals, corporations, and governments. The services provided by investment banks include raising capital, managing risk, conducting research, and facilitating mergers and acquisitions.

Explanation

Investment banks (IB) have the resources to provide their clients with a vast array of financial services. Clients can include small and large companies, government agencies as well as individual investors. Generally, the services provided by investment banks can be divided into consulting services and securities trading. Examples of the financial services provided by an investment bank include:

Issuing Securities: includes both debt financing as well as initial public offerings of common stock used by corporations to raise capital. Services include consulting, market making, underwriting of securities, and the initial sale of the securities.
Research: includes both buy and sell side advice such as the trading (selling) of securities as well as underwriting and promotion. Buy side services include providing advice on the quality of securities to its clients. Services in this area may also include credit research as well as strategic consulting on a variety of topics including mergers and acquisitions.
Risk Management: includes providing their clients with market and credit risk analyses, evaluation of balance sheets, and developing credit solutions.

Related Content

What Can Help You Meet Your Budget While Shopping for Important Items?
Budgeting while ensuring you don't compromise on quality can seem daunting. Whether filling your pantry, updating your wardrobe, or keeping up with the latest tech, smart shopping strategies are crucial for keeping your finances in check.
April 2nd, 2024
How to Make a Million Dollars in 10 Years
Truthfully, this title should actually be “How to Make a Million Dollars in 10 Years Without Going Into Debt", but that is just getting a little too winded for my liking. It’s true though!
December 6th, 2024
How to Apply Maslow’s Hierarchy to Your Money This Year
You might vaguely remember your psychology teacher talking about Maslow. He pointed at a picture of a triangle as you nodded off in the back of the school room.
November 18th, 2024
How to Tackle Multiple Savings Goals
When there’s only so much money to go around, there are often multiple savings goals competing for your money. Think of the young professional who’d like to get a more reliable car, buy a house, and save for retirement. Or consider the young family that’s saving for college, retirement, and a bigger house.
March 22nd, 2024
The Countdown to Early Retirement: 10 Expenses to Eliminate
Dreaming of waving goodbye to the daily grind five years ahead of schedule? The road to early retirement is paved with more than good intentions; it requires a meticulously crafted strategy with surprising twists. It's not solely about what you should be doing—like diligently saving a portion of your income or investing wisely—but also about what you need to stop doing.
March 22nd, 2024