In banking terminology, the term Investment Banking refers to the act of underwriting securities for corporations and municipalities. Investment Banking also refers to the facilitation of mergers and acquisitions between corporations.Together with trading, these activities form the basic business of investment banks.
For example, Investment Banking directs the issuance of stocks by corporations and municipalities and as such, the investment bank involved takes an active role in the marketing and sale of those securities. Often, the investment bank will take on a large block of stock that they are underwriting and continue trading the shares in the capacity of a market maker to the secondary market. Other important services that Investment Banking institutions provide include: corporate restructuring, equity placements and mergers and acquisitions. Investment Banks do not accept deposits or offer loans to individuals like traditional banks, they instead concentrate mainly on the commercial Investment Banking sector of the market, servicing businesses, corporations and large investors rather than the retail banking sector.