Investment bank

Investment banks assist corporations in raising funds in the public markets (both equity and debt). They may also advise private individuals who have sufficient wealth (known as Private Equity or Private Banking).

Investment banks will typically be concerned with several business units, including Corporate Finance (concerned with managing the finances of corporations, including mergers, acquisitions and disposals), Equities (concerned with research and valuation of company shares) and Trading (concerned with buying and selling shares both on behalf of the bank's clients and sometimes also for the bank itself). Because potential conflicts of interest may arise between different parts of a bank, the authorities that regulate investment banking (the FSA in the United Kingdom and the SEC in the United States) require that banks impose a Chinese wall which prohibits communication between equities research and equities sales.

In the United States, the Glass-Steagall Act prohibited banks from offering both commercial and investment services. The Glass-Steagall Act was repealed by the Gramm-Leach-Bliley Act in 1999.

Some of the major investment banks include:

• Morgan Stanley
• Goldman Sachs[?]
• Credit Suisse First Boston[?]
• JP Morgan[?]
• ABN Amro[?]

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See also: Bank