Short definition: Investment banking is a specialized financial services sector that helps companies and governments raise capital and provides advisory services on mergers, acquisitions, and other financial transactions.
Explanation: Investment banks act as intermediaries between companies seeking capital and investors who are willing to provide it. They assist companies in issuing stocks and bonds, underwriting securities offerings, and facilitating mergers and acquisitions. Investment banks also provide advisory services on various financial matters, such as capital structure, risk management, and strategic planning.
Example: An investment bank might help a company go public by underwriting its initial public offering (IPO) or assist two companies in negotiating and executing a merger.
Additional information (optional): Investment banking is a highly competitive and demanding field that requires strong analytical and communication skills. Investment bankers typically work long hours and are well-compensated for their expertise and contributions to successful financial transactions.