Investment Banks are those that provide services related to investment. They do not provide direct credit to the customers, as done by Commercial Banks.
The main services rendered by an Investment Bank include :
- Helping companies, governments and their agencies to raise money by issuing and selling securities in the primary market.
- Assist public and private corporations in raising funds in the capital markets and the division handling this is called the "Investment Banking Division" (IBD)
- Provide financial services such as the trading of fixed income, foreign exchange, commodity, and equity securities and act as intermediaries in trading for clients.
- "Underwrite" stocks and bonds and other types of financial transactions
- Offer assistance in the purchase and sale of stocks, bonds, and mutual funds to the corporates
- Operate as both brokerages and investment banks
- Giving advice on mergers and acquisitions