What is an Investment Bank?

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Investment banking is the practice of raising money, either by an individual, corporation or government agency for the sole purpose of investing.

Here is a quick rundown of what goes on in an investment bank.

The Purpose of an Investment Bank

Along with helping people raise money, an investment bank is involved in;

  • mergers and acquisitions
  • derivative trading
  • market making
  • fixed income instruments
  • foreign exchange
  • commodities
  • equity securities

An investment bank is split into the sections of:

  • Front office
  • Middle office
  • Back office

Investment Bank Activities

Front office investment bank activities include the following.

  • Investment banking (also called corporate finance):

1.  help customers raise funds

2.  give advice on mergers and acquisitions

3.  subscribe investors to security issuance

4.  co-ordinate with bidders

5.  negotiate with a merger target

  • Sales and trading:

1.  buying and selling products

2.  suggest trading ideas

3.  take orders

4.  price and execute trades

5.  structures new products for a specific need

6.  advising of strategies in various markets

7.  proprietary trading

  • Research

1.  reviews companies

2.  writes reports about buying and selling prospects

3.  generate revenue

4.  help traders in trading

5.  suggesting ideas to customers

6.  investment advice

Middle office investment bank activities include the following.

  • Risk management: analyzing the credit and market risk that traders take
  • Corporate treasury: responsible for the banks funding
  • Financial control: analyzes the banks’ capital flow
  • Corporate strategy: strategies for enhances the banks finances
  • Compliance: the banks daily operations

Back office investment bank activities include the following.

  • Operations:

1.  checking data trades

2.  quality control

3.  transacting required transfers

  • Technology:

1.  in-house software maintenance

2.  technical support

There are plenty of areas of investment banking you can get involved in if you are looking for a career in finance.

 

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Loans for Your Financial Needs

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For people looking for financial help, there are many options available that can function well for various needs. Typically, this financial help is in the form of loans used to finance different types of products and services. Because there are so many options with different stipulations, it is important for people who might be seeking these loan-based options to understand what sets one apart from another, as well as what kinds of situations they might be most effective for. Below is a list of some of the most common loans that people generally turn to for financial help.

Student Loans

Student loans are an extremely common type of loan. Generally, education-based expenses are far greater than what most middle-class families can afford at one time. Because of this, they seek financial help through student loan organizations. For the most part, a student loan has lower interest than a generic loan. It also has many more options attached to it, ensuring versatility for the borrower.

Payday Loans

Payday loans are offered by services such as Payday One. They give people the option to get an advance on their paychecks. These types of loans are exceptionally useful if a bill comes due before payday.

Auto Loans

People can use auto loans when looking to buy an automobile but cannot afford the price. This is one of the most common types of loans. Auto loans generally revolve around a five-year term at a fixed interest rate.

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