The Positive Effect of Investment Banks

Employee is another important stakeholder of the investment banking industry. Do investment banks provide satisfactory career to their employees? During the past years, the job market in investment banking industry displayed the following aspects: More lay-offs and job cuts, increased workloads, decreased incomes, and reduced recruitment. It looks like employees (and possible ones like MBA graduates) suffered a lot during this period. But if we consider the global economic environment, the situation was not so bad for the employees of the investment banking industry. The global economic recession made the whole career market suffer. Also, if we consider the much higher income level of these employees, it is reasonable that they have to take higher risks compared to most other careers, for this is not a career of stability. Working in an investment bank means an employee is ready to work at anytime and she or he has to continuously enhance her/his skills and abilities as well as networks. This is a job of challenge. Therefore, employees should adapt themselves to the difficult and complex requirements of positions they take.

Do investment banks create value for their clients? This is the most often asked question. As financial market intermediates, investment banks generate three core activities when they do business:

Corporate finance:
An investment bank works as a facilitator to intermediate companies and investors. For companies that need financing, investment banks work as underwriters or book builders to help them design and realize their financing strategy through IPOs, rights issues, etc. They a