Investment Banking refers to financial consultancy and their main revenue generation operates through cash market dealing with securities as well as primary market dealing with bonds. In fact, they provide legal advisory services for mergers and acquisitions. According to SEC (FINRA) regulations such an advisor (individual or a financial institution ) should be a licensed broker or an authorized dealer.
First world countries primarily the G7 nations having strong economic platform, banking sector had never delineated investment banking as a separate domain. Strategic financial advisor and services often include trading of derivatives (futures and options), equities and commodity market trading. Their financial planning services included mergers and acquisitions of institutional houses and thus acted as a perfect third-party consultant.
Their revenue generation has always been bilateral. Research, promotion, marketing dominated largely in securities and cash market trading. On the other hand, dealing with various funds, which categorically include pension funds, hedge funds, mutual funds, insurances of various categories by utilizing their retail database, which actually generated their revenue from their respective clients through the “buy side”.
The last two of the” bulge bracket” firms that existed on Wall Street were Morgan Stanley and Goldman Sachs. However, on the 22nd of September,2008 they responded to the U.S financial crisis by electing to convert into traditional banking institutions. There are banks that are “universal” rather than specifically being bulge market investment banks as they accept deposits. These are Citigroup, Deutsche Bank, UBS AG , JP Morgan Chase , Credit Suisse , HSBC and Barclays.
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