The original purpose of an investment bank was to raise capital and advise on M&As and other corporate financial strategies. As banking firms have diversified, investment banks have come to fill a variety of roles:

– Underwriting and distributing new security issues

– Offering brokerage services to public & institutional investors

– Providing financial advice to corporate clients, e.g. on securities issues and M&As

– Providing financial security research to investors and corporate customers

– Market making in particular securities.

Investment banks have also moved into forex markets, private banking, asset management and bridge financing.

A key role of investment banks is to help companies raise capital in the capital markets by arranging the issuance of new securities. There are two ways to do this: through a public offering or through a private placement.