What do investment banks do

Adviser or dealer
    And sometimes conflicting - - Investment Banking is the functioning of financial markets, please do two very different.
Traditional investment banking refers to the activities of financial advice.
It is to borrow money on the bond market, the stock market to float, for example, you want to buy other companies or large companies, may request the help of the bank.
In this capacity, the investment bank, which acts as an impartial advisor - as lawyers and accountants - in exchange for a fee, to help its customers use its expertise.
Read the main story Big BankingHSBC face the wrath of investors would pay The bank, Moody's downgrade warning Banks face control 'central' Please push the cost of PPI Lloyds loss However, the investment bank is also something else very different - they go directly to financial markets on their own.
The investment banking sector "market" for the purchase of financial assets from a client, which makes money by selling separately - often substantial markup.
Profit and loss
    The customer will be able to guess the financial markets, complex contract - is "derived" the master of the bank's capital markets were behind the boom of the last 10 years - the children.
For example, investment banks, the Moscow office, may know the local mortgage companies, pension funds may find that you want to purchase residential mortgages in London and Russia.
Banks may offer to buy the debt for Russian customers, through derivative contracts, but offer Rondonkuraianto provide a much higher price.
The boom years of huge profits for these types of operations - is an enormous time and recovery.
These transactions are now available free of risk for investment banks - the buyer has to finish everything at your own risk.
However, as indicated by the collapse of Lehman Brothers and businesses can include many hidden risks discovered during the financial crisis.
Conflicts of interest
     Recommendation ゴールドマンサックスボスロイドブランクフェイン department colleague, the market traders and sales personnel department, and has no obligation to take the benefit of clients who may be considered sophisticated, unlike the actions of his company from a Lil group of U.S. policy.
Specified by the client's investment advisory private banking information to people "inside" which could be exploited by traders in banks - This is a known conflict of interest.
For this reason, all investment banks are prevented from passing information to the consulting services market sector, "Chinese walls" are required by law to have.
However, revealed a new source of controversy is the financial crisis - the watchdog of the U.S. financial, investment banking Ekuresutongorudomansakkusu found misunderstood investment accounts to buy a real disaster.
If some politicians have led traders to seek new rules prohibit U.S. investment bank to take advantage of the ease of customer deceived.
Split AC
    To get money from ordinary people, make loans to local businesses - such as investment banks that are not strictly "traditional" talking to the bank.
But most investment banks do not stop the retail banks and Kina Hiroshi partnership.
Warburg, Salomon Brothers, JP Morgan, Merrill Lynch, Bear Stearns is an investment bank was acquired by any bank in the main street.

    Vinsukeburu business and is divided into election campaign British bank, Deutsche Bank, Barclays Bank, increased its investment from the outset. Goldman Sachs and Morgan Stanley, the only remain as a pure investment bank.
This "universal" in partnership with banks, investment banks can put all retail deposits with interest.
However, since the financial crisis, these banks again to divide until a call was made on both sides of the Atlantic.
In the U.S., Poruboruka former central bank governor, government, gambling at high risk of depositors' money in the global market, successfully argued that they need to ban these universal banks.
In the UK, an independent banking committee, whose task, among other things is called by a look of complete division Vinsukeburu Ziyuuminsyutou pop.
But the logic of the movement of some queries. Lehman Brothers is not a pure investment bank, is a universal bank, to sink the whole financial system near collapse does not stop them.
Just deserts?
    The level of profits that far exceed the investment bank earned pay of most other industries. Many people wonder why.
The role is hard work and talent. The Bank - Jobs in corporate finance, especially juniors - including weekends, when the work is known for 12 hours plus.
The bank contends that high salaries reflect the importance of their work. Those who can put to use in channeling money from the good deeds a person can afford, the City and Wall Street will help support economic growth and promote investment.
Investment banks, other banks, weakening their own interests, but do not enter the market, if someone could ask why.
Part of the answer is that companies must have a global reach very few. To make money, investment banks should be able to meet all types of borrowers and investors from all over the world.

    The collapse of Lehman Brothers, the profits of trading more profitably, usually banks, showed that the risk comes with the ability to spot incoming connection that matches buyers and sellers to see anyone.
But many others are a real investment bank reported income, are not required.
Why the banks are paid as a bonus large, hiding their true risks its management and shareholders are looking for an ingenious method to report higher profits.
And some companies are earning more than ever, through the creation of a debt you can determine if the limit has been reached already the social utility