Summary of Investment Banking Explained

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Rating

7

Qualities

  • Comprehensive
  • Background
  • For Beginners

Recommendation

In this comprehensive and accessible text, retired professor and former bank executive Michel Fleuriet examines the history, traditions, models and architecture of the world of investment banking. While many observers view the sector as a quintessentially American story, Fleuriet details how its roots in fact span the globe and the centuries. This second edition highlights post-2008 regulations and evolving bank strategies and functions. Students and investment banking clients will find this a useful reference guide.

About the Author

Michel Fleuriet is a retired professor at the Wharton School of Finance and a former executive at HSBC France and Merrill Lynch France.

 

Summary

Investment banks (IBs) serve as conduits for the capital flows and corporate finance critical to a well-functioning economy.

To many outsiders, the world of investment banking (IB) might seem opaque, complicated and, since 2008, a menace to the global economy. That view, however, paints an incorrect picture of a storied and robust sector. Investment banking is a complex and labyrinthine business, but it facilitates the capital flows, investment exchanges, corporate funding and monetary activities critical to a well-functioning economy. IBs trade instruments and conduct a plethora of financial transactions, including managing initial public offerings (IPOs), underwriting government securities and innovating financial contracts.

Investment banking first took root during the 1100s in Europe. The suite of IB offerings evolved from those of 12th-century Italian merchant banks, which accepted deposits, transferred money and purchased equity shares in commercial enterprises like shipping firms. Those merchant banks became financiers to sovereign kingdoms. Securitization – which involves...


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