Functions

• Functions of investment banks include helping companies raise money by assisting in initial public offerings (IPO), helping companies issue debt, providing research to companies and advising companies on deals such as acquisitions and mergers. The term is broad and actually somewhat amorphous. In the case of an IPO, a medium-sized company that wishes to expand might approach an investment bank about an IPO. The investment bank then would perform all the necessary work to give investors the information they need, comply with securities' regulations and actually sell the securities to the public. The investment bank might also retain some of the securities in their own portfolio.
  
  

Major U.S. Investment Banks

• Some of the more prominent U.S. investment banks include Goldman Sachs, Bank of America and Wells Fargo. These companies underwent severe financial hardship in 2008 through 2009 and were regular figures in the daily news. When they emerged from the crisis, they had changed dramatically.
  
  

Changes In Late 2008

• There were major changes in the landscape of investment banks in the U.S. late in 2008. Lehman brothers went bankrupt, Meryl Lynch and Bear Sterns were acquired and several investment banks converted themselves into bank holding companies in an effort to obtain aid from the government among other changes. This conversion into bank holding companies also meant that they would be subject to stricter governmental oversight in the form of higher capital requirements and greater requirements of disclosure among other requirements.
  
  

The Glass Steagall Act

• The Glass Steagall Act was an act that was passed by Congress in response to the great depression in 1932. The act legally required that commercial and investment banks be separate entities. This act was partially repealed with the Gramm-Leach-Bliley Act which allowed commercial and investment banks to consolidate. While the conversion of investment banks into bank holding companies is a change further away from Glass Steagall there are some who call for its return and blame the Gramm-Leach Bliley Act for the financial crises of that late 2000s.
  
  

Careers In Investment Banking

• Investment banking can be a very rewarding and lucrative profession. Despite the long hours, surveys indicate a high level of job satisfaction among investment bankers. Investment bankers have the opportunity to work on exciting projects involving the issuing of new stock or mergers and takeovers. Generally the position requires a two-year Master of Business Administration graduate degree.