An investment bank is a banking segment that provides financial-related services ranging from capital creation, underwriting new debts, and serving as an intermediary in the issuance of securities. Investment banks also assist companies involved in the reorganization, acquisitions, and mergers. They also provide ancillary services such as equity securities, market making, and trading derivatives.
Unlike the retail banking sector, investment banking does not accept cash deposits. The two entities were separated upon the approval of Glass-Steagall Act of 1993. Since 1993, the United States maintains a separation between retail and investment banking. Nevertheless, some industrialized countries such as G7 have not maintained such separation. As part of Dodd-Frank Act of 2010, the United States asserts institutional separation between retail and investment banking.
Structures of Investment Banking
Investment banking may be split into the sell side and the buy side. The sell side involves the promotion of securities and exchange of stock with cash or other securities. Conversely, the buy side provides investment advice to institutions and high-net-worth individuals. Some of the entities on the buy side include hedge funds, life insurance, equity funds, and unit trusts.
Furthermore, investment banking may be subdivided into the public and private segments. The public section deals with publicly disclosed information such as stock analysis while the private sector deals with insider information. The United States requires all investment advisers to be licensed as broker-dealers. They must also subject to the United States Securities and Exchange Commission and comply with Financial Industry Regulatory Authority regulations.
As the economy recovers from the Great Recession, most Americans now focus on their retirement plans. During the recession, pension scheme seemed like a dream, but incredible investment bankers such as Martin Lustgarten make it a reality. While most people consider retirement plan as an important aspect of life, they require support to achieve it. Martin Lustgarten is among the world’s most intelligent investment bankers with a significant impact on the success of his clients.
As a citizen of Venezuela and Austria, Martin leverages his dual citizenship to extend his addressable market. Over the years, Martin has spread his wealth across countries to reduce the expected risk while maximizing profits. Additionally, he leverages his ability to navigate market shifts to act before the market makes a downturn.