An Overview On The Investment Services Industry

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Industry Information and Overview:

The investment services industry is one of the fastest paced and rapidly evolving sectors of the economy. The industry is highly dependent on the state of the economy and is highly cyclical. In 2000 when established firms in the industry began to tap the potential of the Internet, trading volumes crashed in what is now termed the Dot-Com bubble. In 2002 when it seemed that innovative technology and telecommunications companies would continuously improve business productivity, the technology and telecom sectors crashed. More recently, just when the industry thought it figured out how to rig the mortgage market to secure record profits with little to no risk, the entire mortgage market crashed and created a liquidity crisis and a recession that would be later described as the Great Recession. Investment services firms have learned time and time again that they still must contend with an inevitable cycle of boom and bust.

The primary functions of an Investment Bank:

Raising Capital and Security Underwriting: One function of an Investment Bank is to package and issue securities for sale to clients, companies or the general public. An investment bank would for example facilitate the sale of shares of a previously private company that would like to go public and offer those shares for sale to investors on an open market. The investment bank would determine the value of the security and the underlying risk of the asset in order to sell it at an
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