Definition
Investment Bank
investment banks - An Investment Bank is
a financial investment institution which acts as
an intermediary, and performs a variety of services
which includes underwriting (underwrites the securities
by buying all the available shares at a set price
and then reselling them to the public. Or the banks
may act as agents for the issuer and take a commission
on the securities they sell.), usually acting as
an intermediary between an issuer of securities
and investors (helps companies in raising capital
by arranging new bond or stock issues to market),
facilitating mergers and acquisitions and other
corporate reorganizations, acting as a broker for
institutional clients, also responsible for preparing
the company prospectus, which presents important
data about the company to potential investors, In
addition, it handles the sales of large blocks of
previously issued securities, including sales to
institutional investors, such as mutual fund companies
(asset management companies) Unlike a commercial
bank or a savings and loan company, an investment
bank doesn't usually provide retail banking services
to individuals. In this way Investment banks and
traditional banks are separated financially because
they handle different type of economic transactions.
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Private Equity and Venture Capital Glossary
