What is an investment bank. Investment Bank Types, Services and Activities

Quite often today you can meet such a thing as "investment banks". What is that? What is their goal and purpose? What are they created for? What rules are guided by? These, as well as a number of other issues, will be answered within the framework of the article.

general information

So, initially let's find out what investment banks are represented. These are special financial institutions that contribute to attract capital for governments and large companies in world markets. They also provide consulting services during the sale and purchase of a business. An investment commercial bank can also help both bonds and promotions, presenting brokerage services. And finally, it helps to cope with financial instruments, commodity goods, currencies and prepares analytical reports on the markets where it operates.

If we talk about specific definitions, there is no one here, and many countries give their interpretation. We will take the following as a reference point: Investment banks are enterprises that are engaged in corporate and government securities trading, primarily by operating with large packages; They are also engaged in corporate financing in the form of capital attracting on issued shares and bonds or by issuing a long-term investment loan.

Main characteristics

Commercial investment banks have their own unique features. But you can highlight their main characteristics:

1. Thus, the investment bank is a universal large commercial organization that combines and provides a large number of permitted activities in the securities markets and some other financial sites.
2. The main thing is to carry out activities to attract financial resources using securities.
3. As a major organization, the investment bank works almost always on wholesale principles.
4. Priority is given to medium and long-term investments.
5. The basis for the assets portfolio is securities, and the non-commercial part of the market is the greatest interest.

Example of activity

Let's take the BCS as the subject under consideration. The investment bank is engaged in the investment into something is not its only activity. It is a fairly universal institution in which other activities are developed, which are engaged in credit institutions. What does BCS have for this? The investment bank is primarily characterized by well developed and organized in various directions. This creates the basis for investing. Investments are both the most prestigious and most profitable work tools. Therefore, as a rule, all the more or less large companies operate with them.

Functions

So, we know that Russia's investment banks, as well as other states, are special credit institutions that are reported on investments in various companies and enterprises. And they possess the following functions:

1. Engaged in the implementation of passive operations. These include those that help in the formation of the bank's own resources.
2. Engaged in the implementation of active operations. This is understood by certain actions through which credit institutions place resources. These include bank investments, loans for securities and so on. All these operations are called stock.

Investment banks form resources due to their own and the most attention is paid to the release and placement of securities.

What abroad?

In many countries, there have been investment banks / funds for a long time, so you can turn to them in order to better explore the features of the existing mechanisms. So, in developed popular is the provision of direct long-term industrial loan to large enterprises secured by their factories, factories and equipment. This approach is often accompanied by the fact that banks become participants in the subject of economic activity. In other words, there is a process of splicing of industrial and banking capital. How can this happen? One of the options is bank investment. In such cases, buy securities. Then they become the property of the bank itself.

In general, there are quite a lot of interaction options. But directly involved in the credit organization itself in different countries May have its own specifics. When some international investment bank stops the placement of securities, he begins to form a secondary market subsequently for them. For this, he acts as a dealer and broker. In addition, cases of cases where credit institutions act as guarantors or founders of new organizations that conduct primary placement of shares. They can also create consortiums that will include investment and commercial banks, as well as dealer firms for greater efficiency.

And how in the Russian Federation?

We looked pretty well as an international investment bank operates. Now let's pay attention to the situation in Russian Federation. So, in the country they are engaged in the following:

1. Perform dealers, brokers and depositories.
2. Form emission portfolios, as well as - individual sets of securities for specific investors.
3. Organize calculations according to securities transactions.
4. Provide advisory services in investment issues.
5. They are searching for people who are ready to invest their money in various subjects, as well as places where you can get the highest profit.

As an example, let's consider the first investment bank. This is a rather powerful financial institution that specializes in wide spectrum Attachments. So, besides ordinary investments in securities, it also provides the possibility of buying collectible coins, precious metals, operate with assets remotely by means of a protected cryptosystem and electron-digital signature. But the first investment bank is oriented primarily on legal entities. And to use the services of such agencies can be quite problematic in practice for ordinary citizens.

Is everything so bad?

By no means. Many credit institutions are universal. As an example, consider the Investment Trade Bank, also known as Investorgbank. This loan institution is engaged in mobilizing the long-term and its provision of borrowers through the issuance and placement of borrowed obligations. "Investment Trade Bank" is a structure that first is aimed at enterprises and organizations various shapes. But besides this, there are a number of services for the usual alignment. True, you can quickly get anything standard set of services like loans and deposits. Investments, although available, but still require signing a certain number of additional pieces. Therefore, when you hike in such institutions, it is necessary to tune in, which will have to get acquainted with the content of pretty large number documents.

In general, investment banks are structures that can be attributed to one of two types:

1. Act in the field of accommodation and trade in securities.
2. Exercise long-term lending.

Investment banks of the first type

The first such institutions were formed as back in the first quarter of the nineteenth century. In the twentieth century there was a tendency of waste from cases of private bankers, small and medium-sized organizations in favor of large formations. Legislative division on investment and commercial was first conducted on the territory of the United States in 1933 by an act of Glass-Stigolla. The subjects of economic activity you are interested in concentrated on mobilizing funds for large companies and enterprises. Over time, they began to actively participate in the creation of new subjects of economic activity, as well as their reorganizations, mergers and other changes in the organizational structure.

What else do they do?

Initially, it should be noted that such agencies do not accept deposits. They concentrated on the issuance of securities and guarantors. Their income is formed at the expense of commission began or payments of pre-established amounts that do not depend on the performance of activities. Also, banks work as agents who acquire part of the papers in cases where they believe that the company will act successfully and they will be able to earn it. When accommodation occurs, the conditions, deadlines, size and obligations are specified. For more efficient activities, they are organized into bank syndicates.

Now there is often such a state of affairs that without action similarly companies are developing relatively slow, so the investment financial institutions are not working without work. Such a combination is also spread when bank leaders are both members of the Board of Directors of enterprises and corporate structures for which they produce shares. It should be noted that in the field of investment banking it is believed that half the dozen structures here belongs to half, and everyone else is just intermediary organizations. On this, perhaps, everything.

Second Type Investment Banks

They are usually created on a joint-stock basis. It often happens that they are organized along with the state. Their main goal is to ensure medium and long-term lending for certain branches of the economy or special targeted programs. In addition, they can act in the markets of loan capital, mobilizing the funds of the population and small enterprises. They also carry out loan activities and investments in state and local securities. It is impossible not to evaluate their contribution to the development of various financial services. Such banker houses arose during the transition to capitalism and were formed initially from the Roshovshchikov who united into partnership. Initially, they took over the implementation of trade, calculated, acceptance and emission functions. They worked with securities, but, as a rule, state. As of the twenty-first century, approximately fifty powerful banker houses were formed. Their feature is that they, as a rule, were formed from family enterprises and only over time were transformed into joint-stock organizations. But to this day there is a priority of representatives of a specific kind.

What are they doing?

If we talk about passive operations, then these are their own capital, which was formed from family-owned contributions, joint-stock and retained profits, cash funds and other things. This is your own resource of credit institutions.

But active operations are the greatest interest in the framework of the study. They built their true power investment banks. Activities in this case implies work with cash cash. Private and public securities, real estate and financial instruments.

Features

It should be noted that investment banks are usually prerogative of developed countries. Only a relatively small group of developing countries can boast of their presence. After all, they are engaged in real investments, that is, investments in fixed assets, which contributes to the increase in material and production reserves. And for greater efficiency, technological development is required in the form of the result of the scientific and technical revolution and qualified work.

Conclusion

For investment banks when they decide on investments, are important:

• Intellectual production potential.
• Qualification.
• Experience and knowledge of workers.
• Expenditures on training.
• All other things will allow the use of acquired capital as efficiently as possible.

Any large production, financial, credit or brokerage company faces the problems of securities, attracting funds and assets management. Self solve such questions are problematic. And then they turn to the investment bank - a credit and financial institution, which specializes in transactions in stock markets. In addition to these functions, it provides consulting, brokerage services, helps in attracting foreign capital, in conducting currency and raw materials, in creating analytical financial statements.

Investment Commercial Bank

As a rule, the decision that the Bank will invest in investment, participate in the merger of corporations, in the research of the financial market or in the trade of shares takes its leadership. The decision is voluntary, and therefore carrying out activities at their own expense. Positions yourself as an investment-commercial bank far from every credit organization. Russia has a bit in Russia, but their offices are present in all regions in order to take advantage of their services and small regional banks, and large financial institutions.

Investment activity of banks

What implies the investment activity of banks and what purpose do they persecute, providing above the listed services?

As a rule, investment understands investment in securities, pairs, assets, working capital, as well as lending aimed at increasing own capital investment organization. The main purpose of this activity is to receive income from emissions or direct sale of shares, bond securities, currencies, as well as from the provision of mediation services in the stock market. Due to this, you can protect your investments and multiply them, to achieve planned indicators in the return of the bank and the liquidity of their investments.

Investment trade bank

From the above features and goals it follows that investment organizations are universal financial institutions receiving income from the mediation services provided by various credit institutions and legal entities and on the sale of their own products, for example. Therefore, otherwise such a company is called as an investment trading bank. Even the Akb of the same name, which is ready for cooperation with corporate clients and individuals, serves enterprises of various forms of ownership. The main activity is to attract and increase capital by resale or long-term investment.

Investment funds of the bank

Of course, to pay interest, dividends, the profitable part of the investment is possible only from certain funds, which are represented by gold-currency assets, real estate. To manage them, that is, develop them, increasing the cost, will be managers. They act in the interests of investors who are attracted through stock markets or through the banking system. Their attachments or pairs are forming investment funds of the bank, payments from which are made on the basis of returns - the difference between the value of assets at the time of repayment and the price approved during their acquisition.

Investment banks of Russia

Speaking about investing as a separate type of activity of financial institutions, a question arises about the choice of institution. Today, Russia's investment banks are represented by such famous brands as:

• "Capital" from VTB;
• Finnam;
• Group "Sberbank CIB";
• Cerich Capital.

They are recognized as experts with successful Renaissance Capital, Troika and Alor. Despite the fact that their activities cannot be called banking, lending to large financial institutions and long-term investment they are engaged long ago and have high positions in the ranking of the best investment companies.

International Investment Bank

A special role in lending to corporations, in the investment policy of European states, in trade interstate financing, the international investment bank, created on the basis of an intergovernmental agreement, with the support of the UN, is played in the preparation of documentary products. The bank is in Moscow and operates on the territory of the countries of the agreement. He takes part in various national projects, takes responsibility for the management of risks and assets of banks, helps in solving the issues of liquidity and profitability of brands.

Bank investment operations

In addition to the fact that investment companies operate in the interests of their clients, they can conduct their own activities aimed at obtaining income from investments in intellectual property, real estate, securities. Such investment operations of banks allow them to receive free funds that can be used to strengthen its position in the market, an increase in the liquidity of the authorized capital and to diversify the company's activities. In addition, at the expense of these dividends, reserves are formed sufficient to maintain the work of the Bank in the conditions of the crisis or instability of the economy.

Investment banks of the first type

In those situations where the credit organization decides only in securities, their emissions, resale and investment in this type of assets, they are called "first-type investment banks". Their main role is reduced

• to the placement of shares and bonds,
• to conduct international operations in the stock market,
• to consult clients regarding the liquidity of the project,
• to account and analyze the sector under consideration.

These banks can perform founders when creating new financial institutions, help corporations in terms of choosing an investment strategy and its implementation.

Second Type Investment Banks

The same companies that are ready to invest in real estate in the development of the social sphere, in lending to large corporations, were called "second-type investment banks". Quite often, they are formed at the expense of subsidies from the state, share capital and the pre-reserve fund created. The main operations are associated with deposits and lending to legal entities, investment in securities, including public ones. They are actively developing other financial services, for example, conscript-cash services. This activity helps banks to maintain liquidity, maintain their reliability and stability ratings.

Functions of investment banks

The listed types of active and passive operations carried out by commercial and credit institutions denote the functions of investment banks to which include:

• dealership, mediation (accommodation, resale of securities);
• organizational (implementation of settlements on operations, dividend issuance, interest payments);
• consulting (consultations regarding the choice of strategy);
• analytical (search for objects for investment, selection of clients and investors);
• expert (formation of securities portfolios, accompaniment of transactions, emissions).

The essence of investment banking business

Thus, the essence of investment banking business comes down to mediation services, which are provided on one huge multipurpose platform. At the same time, the credit company, open to cooperation with major legal entities, can operate with large cash flows, competently dispose of considerable shares and funds, focusing on long-term investments. And the most important thing is the securities for them are considered the main guideline, the correct management of which will help to achieve high indicators in profitability, the prospects and profitability of the company.

Business Processes Investment Banks

Consequently, the business processes of investment banks of Russia are based around the securities and the business processes of investment banks:

• organization of trade in shares, bonds, corporate securities;
• broker-dealer work that helps depositors to navigate on the choice of the object and the investment program;
• work related to the management of the formed portfolios of investors;
• organization of direct or own investments;
• consulting services;
• management of research and scientific and technical activities.

If the investment bank copes with at least one of these areas, it is considered successful and attractive to its customers.

Investment Bank.) - Financial institute, which organizes for large companies and governments to attract capital in world financial markets, and also provides consulting services when buying and selling business, brokerage services, being a leading mediator in trading in shares and bonds, derivative financial instruments, currencies and commodities And also issues analytical reports on all markets on which it operates.

US banks were divided into commercial and investment in the 1930s due to the Great Depression. However, subsequently, the Glass-Stigolla law was canceled, and commercial banks again received the right to engage in investment banking services.

At present, however, the situation began to change due to the 2007-2009 crisis and many countries, including the United Kingdom and the United States, discuss the issues of separating investment banking from commercial banking.

Activities

For a typical investment bank, the following functions are characteristic:

• Underwriting and securities;
• The offer of brokerage services to private and institutional investors;
• Mergers and acquisition services;
• Financial analytics and research;
• Marketamakers for certain types of securities.

Mergers and acquisitions

Mergers and acquisitions for the investment bank working in a country with a developed financial market, often become the main sector of obtaining revenue. Many Russian enterprises and financial groups have not yet reached the level of development when the need for the services of an investment bank for mergers and acquisitions appears. In Russian conditions, the mergers and acquisitions often understand the operations with major stake packages. However, the purchase and sale of individual enterprises is not identical to mergers and acquisitions. The activities of the Investment Bank during mergers and acquisitions can be divided into the following components:

• consulting activities to determine the optimal business restructuring option;
• attracting financial resources for mergers and acquisitions;
• accumulation on the market of large stake in the client's order (purchase of large packages), sale of large packages;
• restructuring of a separate company and selling its parts;
• development and implementation effective protection Client from absorption.

Securities trade

This type of activity is defined as external due to the possibility of directly selling brokerage services, that is, the services for buying and selling securities.

At the same time, securities trading activity is also carried out as a tool for providing investment banking activities (selling securities placed) and asset management activities (purchase and sale of securities in the process of restructuring securities portfolio). At the same time, in the developed financial markets, under trade, securities is understood not just the process of concluding transactions of purchase / sale of securities, but the implementation of complex trade and arbitration strategies consisting of both many simple purchase / sale transactions, so from more complex transactions.

In Russia today, trade in securities means almost always unambiguous transactions of purchase / sale, and only occasionally large institutions apply more complex transactions.

The organization of securities trading in the framework of the investment bank or large investment company is a separate area of \u200b\u200bbusiness and science, which has its complex patterns and technologies. This is a type of activity that is mastered by market participants in the first place. In most cases, large Russian market participants have enough high-tech units engaged in securities trading operations.

Financial analytics and research

One of the activities of investment banks is the provision of financial analytics on securities that the Bank trades. This activity itself, as a rule, does not bring profit. On the contrary, it became one of the most expensive in investment banks. Therefore, this type of activity can be classified as an intermediate between the external and internal activities of the investment bank. For execution external species Activities Investment Bank also develops internal activities that ensure normal conditions of operation for those units that exercise external activities and make a profit. The largest income of the investment bank should include income from the provision of financing services. Thus, there is a conflict of interest between analytical and external activities, a division of banks. In the United States received significant support for independent analytical agencies. Thanks to the new requirements for which investment banks, in addition to their own analytical reports, should provide independent analytics to their customers.

Notes

Links

• Description of the work of the investment banker (eng.)
• In the United States disappeared the latest independent investment banks Lenta.ru 22.09.2008

Wikimedia Foundation. 2010.

• Boyd, Robert, 1st Lord Kilmarnok
• Helm, Brigitta

Watch what is "Investment Bank" in other dictionaries:

Investment bank - (Investment bank) in the US Bank, which performs many functions of the British Trade Bank (Merchant Bank). Usually it provides consulting services in mergers and acquisitions, and also provides financial resources to industrial corporations ... Financial vocabulary

INVESTMENT BANK - (Investment Bank) Bank in the United States, similar to the British trading bank. Economy. Dictionary. M.: Infra M, Publisher World. J. Black. General editors: D.E.N. Sadden by I.M. 2000. Investment bank, see Bank Investment ... Economic Dictionary

Investment bank - - a credit institution specializing in stock operations. Investment banks were first allocated to a separate category of financial institutions in the United States in 1933. Then Congress adopted the law of the chapter stall, according to which banks ... ... Banking encyclopedia

INVESTMENT BANK - (Investment bank) Investment Bank in the United States, which performs many functions of the British Trade Bank (Merchant Bank). Usually it provides consulting services in mergers and acquisitions of companies, and also provides funds ... ... Business Terms Dictionary

investment bank - In the US, a bank that performs many of the functions of the British Trade Bank (Merchant Bank). Usually it provides consulting services in mergers and acquisitions, and also provides financial resources to industrial corporations, acquiring promotions ... Technical translator directory

Investment bank - (English Investment Bank) Credit organization that carries out financing and lending to capital investments. Activity I.B. Related to the extended reproduction of fixed assets, the implementation of integrated economic development programs ... Encyclopedia Rights

Investment bank - Investment bank (US). Bank specializing in long-term lending to industrial companies. Investment banks are engaged in placing new issues of securities in the market (see Underwriting 2), the management of private portfolio ... ... Dictionary-Directory for Economics

investment bank - Specialized Bank, carrying out investment policy through the acquisition of shares of industrial corporations. Bank resources are formed by selling their own shares. The feature of investment banks is that they are not ... ... Dictionary of economic terms

INVESTMENT BANK - Special credit institute, mobilizing long-term loan capital and providing its borrowers (companies and state) through the issuance and placement of bonds and other borrowed funds. Functions I. b. Include: Finding out the character and ... encyclopedic Dictionary Economics and Rights

investment bank - ECON. Financial institution, which controls the process of issuing municipal bonds, as well as shares and bonds of corporations ... Universal extra practical dictionary I. Mostitsky

Banks are an important economic link in the structure of any state. Commercial banks accumulating money through the contributions of individuals and legal entities, provide them with the use of other commercial structures and individuals by various categories contracts, on various conditions and under different programs. This is necessary both to meet the financial needs of individuals and to ensure the continuous activities of legal entities.

There are different forms of interaction of banking organizations with clients. Sometimes a client organization needs an influx of investment, the need to enter a wider market or modernization of existing production. And in such cases, legal or individuals need a reliable financial consultant, a professional intermediary and a transaction organizer. And in this case, the investment activity of banks is manifested. The study of this type of activity led to numerous studies and dozens of published scientific papers. We tried to combine the most important information for our reader and consider general principles, patterns and features of investment activities of banking organizations.

To date, several basic models of banks are allocated, which provide for investments as one of the main activities. IN the first model There is a clear separation of the role of an ordinary commercial bank (providing credit and financial services) and tasks aimed at investing. The model was first adopted in the mid-30s in the United States, after ratifying the Glass-Stigol law. Also similar model It has the name Saxon (on the principle of the greatest distribution). The gradation was observed until 1999, when the implementation of the Graham Lich law entered the legislation allowed us to create conventional banks structural unitsIncluded in the investment in securities. It is since since the use of financiers an expression "Financial Supermarket" appeared - an organization that is engaged in all possible financial services.

Second model It is called continental (or European) and implies the existence of universal commercial organizations, which includes individual divisions engaged in securities trading, investment, work in the capital market, as well as the provision of standard credit and financial services. As an example, you can bring Deutsche Bank in Germany or Paribas Group in France.

Domestic countries are characterized by the presence of a mixed model.Banks are directly involved in the investment in the industry, and the securities market is developing more and more every year. There are both universal commercial banks with licenses from the Bank of Russia and specific organizations whose activities are regulated by the FSFR. The second category includes brokerage, dealer, depository and managerial activities.

It should be noted that in domestic legislation the concepts of investment activities of banking organizations are not enshrined and there are no legal instruments for regulating this industry.

Services and types of investment activities

The investment activity of commercial banks is the most prestigious direction, which, moreover, is the most profitable. That is why companies engaged in the provision of financial and credit services seek to become participants in free securities markets and engage in investment projects.

Investment banks existing in foreign countries are engaged in providing the following services for their customers:

• Custodial and depository;
• Consulting activities;
• Brokerage services;
• Restructuring options for business by M
• Increased profit by attracting finance.

In order for banks to deal with investment in these areas, they develop several areas that are conditionally divided into internal and external.

External types of investment activities

External implies the fulfillment of two types of tasks: attracting third-party investments and maintaining merging and absorption processes. If investment is attracted, it is most often about placing and deploying deposits (in particular, securities) of its customers, but also there are also options for third-party investment by launching special ways of investment lending to individuals and legal entities.

• Consultations of customers planning to place securities;
• Holding and conducting syndicate management - control of syndicates;
• Work with the papers of its customers;
• Providing customer and own securities on primary and secondary markets.

When there is a prosperous financial system in the state market, commercial banks, which include investment activities, often use the merger and absorption option as a reliable profit scheme.

The overwhelming majority of domestic companies did not reach the level when the issue of the need for M & A procedures is apparent, followed by the investment banks.

In the same case, if the banking organization provides mergers and acquisition services, there are the following activities:

• Consulting customers by options and ways to reorganize business;
• Actual reorganization of the company and the subsequent sale;
• Development and implementation effective mechanisms countering merger;
• Formation and sale of shares packages;
• Attracting finances for merge or absorption.

Internal types of investment activity

The main task of internal investment activities of banking institutions is to ensure the effective functioning of external processes and those departments that are engaged in investments and bring maximum income. Significant varieties of internal activities are:

• Brokerage services;
• Implementation of customer investment portfolio management;
• Personal management;
• Attracting investment.

In the realities of the domestic market, income as a result of the implementation of such activities can vary from 100% of annual losses to impressive income, which are calculated hundreds of percent per year.

Bank investment policy and investment planning

The investment policy of banking organizations is a set of activities that are aimed at developing and the final implementation of ideas on investment management, ensuring the optimal number of investments for efficient activities, as well as an increase in the profitability of the Bank. The most important condition Investment policy of the banking institution is the development of an effective and maximum profitable strategy.

Investment planning provides for the choice of optimal ways of placement and methods for the distribution of funds on a certain period of time with the possibility of further provision of greater profitability and increase in quantity possible operations. Since planning is a complex organizational process, with its implementation, it is necessary to adhere to the following conditions:

• Availability of objective and necessary information data;
• Assessment of available investments, as well as an assessment of profitability with investment;
• Analysis of the costs and finite results of investment projects, as well as the impact on the provision of a bank of a particular project;
• Spent and verified financial plan;

For investment and policies of banks, key factors are the correct determination of the ratio of the number of credit funds and their own financial savings, the development of a mutually beneficial distribution strategy for dividends on investment projects, as well as the optimization of the existing structure of investment investment investment. These three indicators are fundamental factors for those commercial banks that are engaged in investment activities.

Every year, more and more commercial banks appear, which create significant competition. Not only domestic, but also foreign credit and financial organizations involved in it. In such competition, one of the most important factors is the implementation of investment activities related to the conduct of securities operations. All investments of commercial banks have the following distinctive features:

• Investments involve a constant inflow of funds for a long period - even before the amount of investment will fully justify itself;
• When investing, the main initiator of the process is the Bank itself, which seeks to acquire as many asset as possible in the securities markets;
• Unlike borrowed relations, where the bank works with the lender or borrower, during investment there is no personal contact - this is replaced by the securities of enterprises and organizations that are purchased by bank institutions;

Investment portfolio is a combination of all existing banking investments from which profit is obtained. Banks always seek to receive as much profit as possible, but, despite this, a clear ratio of the profitability of projects with their liquidity and financial security should be observed.

The bank, which is engaged in investing in risky projects, which are not liquid, can eventually become insolvent. Accordingly, it can be concluded from the above about the functionality of the investment portfolio.

Why do I need an investment portfolio?

The need for an investment portfolio is revealed through its direct functions. These functions include the following:

1. Stabilization of the financial situation of the banking organization, regardless of the situation in the domestic market: Even if the profit on the number of standard financial services is reduced, they are replaced by income on invested funds in securities.
2. Compensation of credit risks that may arise due to objective circumstances. Banks also take loans that can overlap in securities - thus, the balance of credit / assets is balanced.
3. Diversification of the obtained funds. Securities are not enshrined at a certain region, but are transnational in nature - it contributes to highly efficient diversification of bank revenues.
4. Ensuring the liquidity of the bank. Acquired securities can act as collateral to attract actual funds, or be oversold with similar objectives.
5. Insurance on possible negative changes in legislation, situations that caused by a negative geopolitical situation.
6. Improving balance indicators due to the storage of a certain number of expensive securities.

To ensure a permanent inflow of funds, diversification of income, as well as reduced the possibility of credit risks, securities with investment portfolios are involved different times repayment.

With a decrease in the number of securities, as well as changes in their cost, it is possible to reinvest them into other objects that correspond to the current tasks of the investment policy of banking organizations, and also have better characteristics.

Finally, we note that banks, engaged in investment activities, are essentially participants in the organization and maintaining financial support of numerous innovative projects and scientific institutions around the world. This means that investment activity is beneficial not only to its owners who receive big profits, but also to persons in favor of which investment is being made.

Little where in Russia a specialist working for the first year can count on compensation to $ 7,000-8,000 per month. In investment banks is possible.

The basic meaning of the activities of investment banks is working with clients who want to either buy some kind of business, or sell, or bring the company to the stock exchange. The bank helps them to deal with the law in the law most favorable way. In 2008, the financial crisis led to the dismissals of thousands of Investbanks and urged the appetites that kept their place. It seemed that the burst bubble is no longer inflated. But after a year and a half after the crash of Lehman Brothers and the crisis of other giants, the market began to recover a little. The number of mergers and acquisitions has increased, the debtors are preparing for an IPO to close loans with funds from the sale of shares (the last example is the IPO "Rusal"). According to the report of the Russian office of J. P. Morgan for November 2009, the volume of orders began to grow, bankers are added. Leading hedgean agencies confirm: the demand for financiers went up.

Back in 1989, the former bond merchant Michael Lewis wrote a bestseller "Poker Liazts", naturalistically portraying the "cuisine" of financiers. How much has changed in their lifestyle for 20 years? Forbes decided to find out and at the same time to remind those who wish to follow the heroes of Lewis than them would have to come with for the sake of high salary. We told our stories themselves Investbanks, current and former.

Work at night, show dedication

To begin with the test - will you take you in the investment bank or not?

If you graduated or almost graduated from a decent economic university - GU-HSE, Raa them. Plekhanov, Rosch, Financial Academy, Economy MSU - there is a chance to get to the interview. There will require answers to questions about corporate finances: "What is free cash flow And how is it considered? "," What is the weighted average cost of capital? "," How to build a financial model in Excel, step-by-step? "," What methods of evaluating companies do you know? " etc.

Answers can be found by reading a pair of textbooks. But besides, you need to demonstrate free possession english language And convince the employer in his endurance. And most importantly, to demonstrate the desire to perform a huge number of assignments under constant pressure, in conditions of lack of time.

The first thing that the past selection is encountered, is an installation that the financiers should work a lot. Welcome night vigils. The employee will never leave before nine in the evening - not supposed. The rules of good tone dictate to lay late: leaving earlier, you offend colleagues who have work "with three carts" and which today may be held all night in the office. In the extreme case will have to make a smart person, read the Internet to 10-11 pm.

Non-resistance and perception of all customs inherent in investment banking is called Commitment (Commitment). If the newcomer did not demonstrate the commitment, further participation in the "poker liars" is questionable. Here is an example from life.

Analyst Dmitry entered Renaissance Capital, waiting for the first Monday with trepidation and went to work. Performed duties by 21.00 and went home. In the following days - the same schedule. On Friday, the manager came up to Dmitry and said: "You are not enough time in the office!"

"Imagine, I was not supposed that it was not well fulfilled by the duties or lowered work and left home," Dmitry is indignant. - They said, not enough time in the office! Comment is an important, monumental, the epic statement I do not take. Only silence and reflection are appropriate here. "

However, among the newcomers are those who take all souls and night work, and the arrivals by 7 am to work - in one word, shows the "Comitment". Colleague Dmitry analyst Denis loves to leave later all, hours in 4-5 am. And so that everyone saw, how much he was at work, before leaving the colleagues on E-mail some joke. It seems like people pleased, but on the other hand reminded: "Look, at 5 am I am still in the office!"

"My friend works in London, and they are customary to say" He "SA Good Guy! I Saw Him On Weekends" ("He's cool! I saw him at work on the weekend") - tells Dmitry. - The strange logic of this statement is as follows: If a person on the weekend is in the office, he has a lot of work, and he does not have time to do on weekdays. If you were not in the office on weekends, then you will not be able to impress the experience and class guy. "

Forget about holidays, get ready to work on vacation

Newbie in Investbank is doomed to work as damn. But in the first months, many people will hope that it will be possible to rest on holidays, see relatives and friends, go on vacation. However, these dreams quickly disappear.

An analyst Morgan Stanley Maria gathered for the holidays in his native Kaluga, the birthday of the sister, which I have not seen for a long time. Sitting in the train, Maria received a call from Boss - "Urgently to the office!". What to do? Maria kissed relatives, handed a gift and, sitting for the decency of half an hour, ran into the reverse train.

Here is a fresher story. On New Year's holidays, when the whole team went on the resorts, the Renaissance capital worker Paul sat in the workplace and prepared documents on the transaction. On January 3, he had to go to work for noon, and he left home the next day at seven in the morning - with an indication of being in the office in four hours. You could not sleep, naturally failed, the condition approached the excess, but Paul was aware that you need to work. And then - another day of work and care at 4 am with an indication to come to 10.00 ...

The decline of forces, depression, terrible inappropriate - describes Paul's feelings. In incredible effort of will managed to concentrate on work, which demanded increased attention - the subtraction of the 150-page memorandum in English. "When this madness lasts the third day, the feeling of doom is poured, it seems that it will never end, - Paul sighs. - There is no own strength to get out of the situation, the time becomes rubber. " He feels like Merzko as Maria from Kaluga, but very hoping for a prize at the end of the year.

"It all depends on the bank!" - Irina assures me, working for more than two years in the corporate finance department of one of the largest European banks (and before that - in the Investbank Kalibrom's lamb). We sit in the Italian cafe, as Investbankers can allocate time to meet only during lunch or dinner. Irina is brilliant, practically sparkling hair, a volitional face and blushing eyes. There are three phones in front of it - a working iPhone, a simple home mobile phone and BlackBerry (for posting mail). In the last she, apologizing, looks in a couple of times during lunch. In Western banks, Irina is convinced, the bosses listens to the subordinate, and most importantly, "everything is not so bloodthirsty." In her lips, this means that an average analysts work from 9-10 am to 23-24.

Some Investbanks over time learn to refer to spontaneous challenges to work with humor. Alexander Shulzhenko from the Department of Corporate Finance Deutsche Bank willingly tells how he had to build a financial model on a night street under the supervision of armed guards. Alexander spent vacation in Egypt, rode surfing. Late evening by mail, a task was given that required permanent access to the Internet. At the same time WiFi worked only on the street. On the same night, a local holiday was celebrated in the village. A police patrol, which reveals to tourists, decided to regret next to Alexander until the morning so that the sevaaki do not stick to the proposal to help.

Complete with useless labor

All the above problems of novice investment banking are not limited. Often, the heads ("associates") are engaged in the upbringing of the combat spirit in young people and give the night of tasks that do not require urgent fulfillment.

Analyst Nikita from 15.00 was undressed. Everything you need, he fulfilled and was going, reaching the Internet at the Internet until ten in the evening, serving home. Closer to 22.00 there was a call: the head demanded to make a presentation. Nikita understood that the task was ripe for a long time, it could be given in the afternoon. But all the "associates" once themselves knew the taste of night-to-nights, and Nikita had a suspicion that the situation was similar to the army service - bosses, so that the wards passed through the same peripetics as they.

Nikitin suspicions were confirmed. He set the task to make a presentation by morning. He spent six hours on the task and put the document on the head of the head. He remembered the presentation only in the evening of the next day.

Examples are known and more rigid "education of feelings." At 4 o'clock in the morning, Mikhail Global Bank analyst decided that you could go home, and called a taxi. Driving to your Northern Butovo, Mikhail received a call. With sincere indignation "Assocyth" asks: "Where are you? Immediately to the office, you need to finish work. " "But it is tolerate, if I arrive at 10 am, I can quickly finish everything," Mikhail swallowed. Not anything about this phrase, "Assocyth" ordered to rush to the office. Mikhail had to obey - despite the fact that the work was so not urgent that it was not even the next day, and even later. The only thing that gotten, the thought of the coming bonuses. However, the crisis has happened, and Mikhail cut.

As InvestBanks tell, there are different ways to train the endurance of subordinates. For example, analysts may ask to come to 6-7 in the morning, and the "Assocyt" itself is declared in an office in 9-10 in the morning. Outcome: The analyst smats on chairs and chairs in the office.

Or not on chairs. Investbanking has such a concept as Unison. On slang - sleep on the toilet. According to the informal survey of analysts of banks (Deutsche Bank, Renaissance Capital, UBS, Ing Bank), the toilet cabins "Renaissance Capital" are recognized as the most comfortable in the era when the office was in the Ascension Lane. Plumbing was mounted in such a way that it could be comfortable to take away. At the same time, a huge plus was the soundproofing of the booth, contributing to a strong sleep.

What do workers feel when tolerant of similar tests? Squeeze your teeth, but hope that the annual bonus will pay off. But for this you need to listen before the end of the year. From all those who are dismissed until December 31, in the same Renaissance capital, three salaries are bought off, while in Western banks traditionally compensate for semi-annual salary.

"Our activity is closest to the work of politicians," said Dmitry, an employee of the Department of Customer Relations in a foreign investment bank. He admits that it tires not so much 12-13 hours of operation, how much psychological tension. Every day, every hour you need to portray something from yourself, comply with the rules. "It is required to behave as the authorities are waiting for you - to take a big initiative, even if it is not needed," Dmitry crushes. "I take it as a show business - Masha all the time handle:" I am "," I'm here "," I participate in this. " But for this, it is usually no creative work. "

Why investbanks all endure

Why do people agree to a similar way of life? What reconciles them with care to work with your own wedding, with uncertainty in the plans even on the weekend?

First, money. The formal salary of the analyst of the first year of work in the investment banks - 70,000-120,000 rubles per month, but if the year was successful, at the end they can pay a bonus in the amount of annual salary (in the pre-crisis years more). "The Blue Dream of Every Investbanker is to earn in five years to an apartment with a car and dump," says an Ing employee.

"It is important that slavery is not forever, but for a completely limit term, for example, for three years," Irina argued from a major European bank. For the 25-year-old, this time interval does not look fatabal. Speak money easily, spending them almost once, only on vacation.

Secondly, Investbanks are valued in industrial companies. "Work in corporate finances gives such an experience that I would receive ten years old," Irina emphasizes. It is believed that experts passed fire, water and copper pipes. It's not just endurance. Frequent business trips, communication with customers, familiarity with different businesses expand the horizons.

"I motivate work in the international team, participation in the transactions that they write about the first pages of newspapers, says Alexander Shulzhenko, for three years he has served to the title of" Associat ". - Our work combines knowledge of financial statements, jurisprudence, strategic management. Development contributes regular trainings. This summer, all analysts who have risen to Associates have passed the EXECUTIVE MBA Summer Program in the New York School of Business Columbia.

In addition, employees of investment banks have been opened in all countries, taxi and telephone are paid, provided medical services, big social package. Love all this hard. Therefore, if there is an investment banking and fall into downshifting, then, as a rule, return to their or related industries.

However, there are exceptions. In the summer of 2009, I met a classmate with whom I studied at Mehmat MSU. Mary three years worked in and J. P. Morgan and other banks. She was going to raise in service - and she quit on own willing. Avenience, after the last working day, they flew to Spain with her friend, as a sign of finding freedom, shaving heads. Then there was a tour of Europe, a march of the USA, where Maria comes over all friends. Now, seven months after dismissal, she is studying in the photoshole at the Faculty of Faculty of Vgika.

"IB is a lifestyle," explains Maria. - You work with customers from different industries, communicate with the professionals of your business, which can be learned a lot. But now I will not shudder from each phone call with the thought that they again cause to the office. " Maria wants to professionally engage in photography. As a last resort, she allows return to Research (market research) or Trading (trade on the stock exchange) Investbanks.

I asked: if it does not work out to retrain the photographers or go to the "calm" divisions, will it return to corporate finance? Maria vigorously climbed his head: "No. Unambiguously no. "