What is Investment Banking?

Investment banking is a specialized financial service that helps businesses, governments, and other institutions to raise capital. It also assists them in managing major financial transactions.

Unlike commercial banks, investment banks do not accept public deposits or provide regular banking services. Their main focus is on corporate finance and capital market activities.

Investment banks act as financial intermediaries. They connect organizations that need funds with investors who are willing to invest. This helps ensure the smooth flow of capital in the economy.

Key Characteristics

  • Helps businesses and governments to raise capital.
  • Acts as an intermediary between issuers and investors.
  • Provides expert support for complex financial transactions.
  • Also known as merchant banking in many countries.

In short, investment banking is a specialized banking service that helps organizations raise capital and manage important financial transactions.

Investment Banking (IB), Module: A, 96th BPE 1(a)

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