|
Investment banking is a major activity that most domestic and international banks engage in. It involves the practises of raising capital for individuals, corporations, governments and any other institution. If a company wants to increase its funds by letting its own money do the work, then they head to the nearest investment banker. The investment bank or banker is an entity authorised by law to act on the behalf of its client to trade in securities. By trade, we mean buy and sell. For instance, buying trade products like mutual funds, stocks, securities, insurance, bonds and more. On the other hand, selling involves turning these assets into cash by offering them back to the market. So if you buy a financial product for a certain sum and then sell it for a higher sum then there is a profit made just by the money doing the work. Investment banks make sure that the persons employed in their financial investment services section are highly trained. This means that they are also constantly in touch with market trends, with an indepth understanding of what may cause fluctuations. For instance, if the president of a company that is floating a mutual fund falls gravely ill, then this is taken into account, since the market speculation may reduce the value of that mutual fund. Or perhaps a smaller local company is taken over by a larger international one. Then the smaller company’s stock will go up and it may be a good time to purchase it. In this way, investment banking involves someone doing the homework of understanding the rise and fall in the market so you don’t have to. An investment bank can also study your institution to come up with strategies of investments. Not only this, they can offer guidance on mergers and acquisitions. An investment bank’s services are divided up into three. The front office services includes private equity and corporate financial services, investments and carrying out market research, market analysis and coming up with strategy to allocate funds, reduce risk and enhance profit. The middle office services include the legal aspect of making sure the client sticks to the fine print of trade regulations. Keeping a watch on the income and expenditure of the company is also part of this profile since investments are based on this. And finally the back office services involve the nitty-gritty aspects. This is follow-up to make sure the right signatures are in place, all the t’s are crossed and I’s are dotted, the financial products intended to be traded are indeed bought or sold, if any software needs to be reconfigured, updated, etc, it is carried out. Jenny Morrow is a specialist writer in financial subjects. She writes about the personal internet banking, islamic banking & business banking. Her articles provide useful information as well as knowledge to find out the right banking products.
Related Articles -
Financial Investment Services, Investment Banking,
|
