The situation on Wall Street today will not detract from the desirability of investment banking careers. This is not only an exciting and fast-paced way of life but is very financially rewarding; as witnessed by the great bonuses distributed by the investment banking houses.
Investment bankers cater to governments, companies and individuals. They assist in the issuance of securities by both government and corporations. These securities can be in the form of bonds, notes and bills for government entities and commercial paper for corporations. Commercial paper consists of short-term loans for companies and the amount of interest earned depends upon how secure the company is in its finances and prospects for future growth.
Individuals use investment banking services in purchasing the government bonds, whether issued by federal, state, local or other authorities such as quasi-government entities. The people investing want to have their money grow for retirement or as a way of earning a living. The investment banking houses are providing advice to investors along with trading and managing the instruments held by the investors.
An integral component in studying for investment banking careers is educating the student in how to discern between a good investment and one that is of a lesser quality. Many investment banking houses rate the investments with specific designations that will allow the investor to gauge the risk involved.
Investment banking careers can entail working for the giants of Wall Street such as Goldman-Sachs and JP Morgan or smaller businesses, commonly called boutiques with lesser known names. Many times investment banking careers consist of transferring from the larger firms to the smaller firms. Many employees who have gained experience at larger firms leave to start their own boutique firms or become officers in the smaller firms.
The investment banking houses often trade with their own funds. This is now becoming a national issue with the proposed tax on this type of trade. The issue is whether these private trades affect the service offered to clients who have put their money into these investment banks for profit, and whether the banks are sufficiently concerned about their clients’ investments.
Within an investment banking firm are various departments. There is the trading floor. Another section is devoted to getting new business via sales. There are also the departments that work on issuing securities for both companies and government. There is a nice commission involved in this matter. Investment banking covers many interesting areas of banking. It is certainly unlike what the average person comes across when entering their local bank for a deposit, withdrawal or request for a loan.
