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investment bank

 
Dictionary: investment bank
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n.
A financial institution that deals primarily with raising capital, corporate mergers and acquisitions, and securities trades.


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Britannica Concise Encyclopedia: investment bank
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Home > Library > Miscellaneous > Britannica Concise Encyclopedia

Firm that originates, underwrites, and distributes new security issues of corporations and government agencies. The Banking Act of 1933 required the separation of investment banking and commercial banking functions. Investment banks operate by purchasing all the new securities issued by a corporation at one price and selling fractions of the new issue to the investing public at prices high enough to yield a profit. The investment bank is responsible for setting the public offering price, which it bases on probable demand and assessments of the economic climate. A syndicate of investment banking firms underwrites and distributes most security issues in order to divide the risk of the new issue. An initial public offering (IPO) refers to the issuance of the first public shares of a formerly nonpublic company. See also bank; central bank; savings bank; security.

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Investment Dictionary: Investment Bank - IB
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Home > Library > Business & Finance > Investment Dictionary

A financial intermediary that performs a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.

Investopedia Says:
The role of the investment bank begins with pre-underwriting counseling and continues after the distribution of securities in the form of advice.

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Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.  Read more
Britannica Concise Encyclopedia. Britannica Concise Encyclopedia. © 2006 Encyclopædia Britannica, Inc. All rights reserved.  Read more
Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more