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Investment Banks – Just What Are They?

We hear the phrase "investment bank" every day. These banks are frequently criticized for their part in the financial crisis , and criticized for the huge profits they make and the massive payouts for their employees.

What is an investment bank? First of all, they are very different from the commercial banks we are all familiar with. They do not take deposits like the retail bank on the corner. You can also search the web to get more information about bank advisory assistance.

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Instead, they primarily assist in the buying, selling, and issuing of securities – that is stocks, bonds, and similar financial instruments.

They assist companies and institutions with "buy-side" and "sell-side" activities. The buy-side refers to the advising of institutions concerned with buying assets and securities. 

Investment Banking (Corporate Finance)

Investment banking can be a confusing term because many people use it to refer to any activities performed by an i-bank. More specifically, though, investment banking refers to assisting companies with raising capital and giving advice on mergers and acquisitions.

The corporate finance department of a bank is the group that works with a company to put together an initial public offering (IPO). 

Another service that the corporate finance department might offer is the delivery of fair opinions. In a fair opinion, an investment bank will perform an analysis of a potential acquisition and render an opinion as to whether a reasonable price is being offered for the target company.