Investment banking benefits the economy, specifically businesses in profound ways. Without investment banking, our economy would be stagnant and new businesses would lack the capital they need to expand. This would create a lack of news jobs and production would suffer as a result.
To explain in more detail, investment banks are big investors or lenders of money to businesses. The reason most businesses take on loans or credit is so that they can invest that money into a new plant, a new office or new product. This often results in new jobs being created or a better product. In the end, the economy benefits as a whole.
As you can see, investment banking is vital to the health and well being of our economy. Just imagine, if you saw most investment banks disappear overnight. Who would provide businesses with much needed loans? What would happen if these businesses stopped getting access to investment banks? It is not an exaggeration to say then, that investment banks are a crucial part of our free market economy.
Investment banks do many other things besides just loaning out money to businesses. They help to move goods on the market. They will buy and sell stock, items and commodities. One of the common tasks of investment banks is not only lending money to companies, but appraising their value and then issuing shares for sale. Once the share are issued, the investment bank can then sell the stocks in exchange for a commission.
Investment banks also act as direct investors in properties. They can buy out properties entirely and renovate them. They can then sell them or have them managed on their own behalf.
Martin Lustgarten is an example of an investment banker who has achieved considerable success. The name of the investment bank that Martin Lustgarten works at is called Lustgarten Martin. He is the founder and director of the company which is based out of South Florida.
Martin Lustgarten’s investment bank is focused on investment in the Latin American markets. Mr. Lustgarten has spent significant time working and living in Latin America, so he has developed a keen eye for smart investments in Latin America. He is also fluent in the Spanish language, culture and business practices.
Investment banking is a private brokerage firm that provides various financial-related services to individuals, organizations, corporations, and governments. Investment banks are responsible for helping companies raise capital and serve as the intermediary in the issuance of publicly traded commodities. Moreover, investment banking also provides advisory services to companies during amalgamations and restructuring. They also offer supplementary services such as securities trading.
Unlike commercial banking sector, investment banking does not accept deposits. Upon the endorsement of Glass-Steagall Act of 1993, the U.S. upholds a separation between the banking segments. However, some industrialized nations have traditionally not supported the separation between the two sectors. As part of Dodd-Frank Act of 2010, the Volcker Rules assumes some functional separation between the two banking segments.
Investment banking is categorized into the sell side and the buy side. The sell side trades securities for other securities and cash whereas the buy side provides financial advice to institutions. Buy side entities include unit funds, life insurance companies, hedge funds, and private equity funds. Furthermore, an investment bank may also be split into the public and private sectors. While the public sector deals with publicly disclosed information, the private segment deals with insider information. Importantly, the United States requires that financial advisors must subject to the U.S. Financial Industry Regulatory Authority and must be licensed as a broker-dealer.
About: Martin Lustgarten
As the economy recovers, it is the time for people to plan for their future. During the great economic recession in the United States, retirement plan seemed like a dream. However, with successful investment tips from financial investment experts like Martin Lustgarten, that dream can be a reality. Americans wishing to retire comfortably should start planning for their retirement now. Although most people consider retirement as an important life aspect, just a few can plan for their retirement life. Martin Lustgarten is among the world’s most intelligent financial services advisors with notable success.
As a citizen of Venezuela and Austria, Lustgarten leverages his citizenship to offer reliable investment advisory services to his clients for decades. Martin encourages global-scale investments as they yield high returns and have a lower risk. As a veteran in interpreting emerging market trends, Martin Lustgarten helps his clients to act quickly when the market is about to fluctuate.