Editing Investment banking (section)

==Industry profile==
The investment banking industry can be broken up into [[Bulge Bracket]] (upper tier), [[Bulge Bracket#Middle Market|Middle Market]] (mid-level businesses), and [[Boutique investment bank|boutique market]] (specialized businesses) categories. There are various [[trade association|trade]] associations throughout the world which represent the industry in [[lobbying]], facilitate industry standards, and publish statistics. The International Council of Securities Associations (ICSA) is a global group of trade associations.

In the United States, the [[Securities Industry and Financial Markets Association]] (SIFMA) is likely the most significant; however, several of the large investment banks are members of the [[American Bankers Association]] Securities Association (ABASA),<ref>{{Cite web|url=http://www.aba.com/ABASA/Pages/default.aspx|title=ABA Securities Association|date=July 4, 2012|archive-url=https://web.archive.org/web/20120704040429/http://www.aba.com/ABASA/Pages/default.aspx|archive-date=2012-07-04}}</ref> while small investment banks are members of the National Investment Banking Association (NIBA).

In Europe, the European Forum of Securities Associations was formed in 2007 by various European trade associations.<ref>[http://www.finextra.com/news/fullstory.aspx?newsitemid=16436 Investment banking trade associations join forces in Europe] {{Webarchive|url=https://web.archive.org/web/20130206004054/http://www.finextra.com/news/fullstory.aspx?newsitemid=16436 |date=2013-02-06 }}. Finextra.</ref> Several European trade associations (principally the London Investment Banking Association and the European SIFMA affiliate) combined in November 2009 to form the [[Association for Financial Markets in Europe]] (AFME).<ref>{{Cite web |url=http://www.afme.eu/About/History.aspx |title=History – About – AFME (Association for Financial Markets in Europe) |access-date=16 September 2016 |archive-url=https://web.archive.org/web/20160801060908/http://www.afme.eu/About/History.aspx |archive-date=1 August 2016 |url-status=dead }}</ref>

In the [[securities industry in China]], the [[Securities Association of China]] is a self-regulatory organization whose members are largely investment banks.

===Global size and revenue mix===
Global investment banking revenue increased for the fifth year running in 2007, to a record US$84 billion, which was up 22% on the previous year and more than double the level in 2003.<ref name=IFSL2010>International Financial Services London. (2010). [https://web.archive.org/web/20110810042856/http://www.thecityuk.com/assets/Uploads/Banking-2010.pdf BANKING City Business Series]</ref> Subsequent to their exposure to United States [[Subprime lending|sub-prime]] securities investments, many investment banks have experienced losses. As of late 2012, global revenues for investment banks were estimated at $240 billion, down about a third from 2009, as companies pursued less deals and traded less.<ref>(15 September 2012). [https://web.archive.org/web/20150710233226/http://www.economist.com/node/21562925 Dream turns to nightmare]. ''[[The Economist]]''.</ref> Differences in total revenue are likely due to different ways of classifying investment banking revenue, such as subtracting proprietary trading revenue.

In terms of total revenue, SEC filings of the major independent investment banks in the United States show that investment banking (defined as M&A advisory services and security underwriting) made up only about 15–20% of total revenue for these banks from 1996 to 2006, with the majority of revenue (60+% in some years) brought in by "trading" which includes brokerage commissions and proprietary trading; the proprietary trading is estimated to provide a significant portion of this revenue.<ref name=Rhee2010/>

The United States generated 46% of global revenue in 2009, down from 56% in 1999. Europe (with [[Middle East]] and [[Africa]]) generated about a third, while Asian countries generated the remaining 21%.<ref name=IFSL2010/>{{rp|8}} The industry is heavily concentrated in a small number of major financial centers, including [[New York City]], [[City of London]], [[Frankfurt#Economy and business|Frankfurt]], [[Hong Kong]], [[Singapore]], and [[Tokyo]]. The majority of the world's largest [[Bulge Bracket]] investment banks and their [[investment management|investment managers]] are headquartered in New York and are also important participants in other financial centers.<ref name=NYCWorld'sLargestInvestmentBankingCenter>{{cite web|url=http://www.nyc.gov/html/om/pdf/ny_report_final.pdf|title=Sustaining New York's and the US' Global Financial Services Leadership|publisher=City of New York|author=McKinsey & Company and the New York City Economic Development Corporation|access-date=8 December 2018|archive-date=16 June 2015|archive-url=https://web.archive.org/web/20150616052440/http://www.nyc.gov/html/om/pdf/ny_report_final.pdf|url-status=live}}</ref> The city of London has historically served as a hub of European M&A activity, often facilitating the most capital movement and [[Corporate finance|corporate restructuring]] in the area.<ref>{{Cite book|last=Fohlin|first=Caroline|editor1-first=Youssef|editor1-last=Cassis|editor2-first=Catherine R|editor2-last=Schenk|editor3-first=Richard S|editor3-last=Grossman|title=The Oxford Handbook of Banking and Financial History|date=19 May 2016|chapter=A Brief History of Investment Banking from Medieval Times to the Present|pages=132–162|doi=10.1093/oxfordhb/9780199658626.013.8|isbn=978-0-19-965862-6|chapter-url=http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199658626.001.0001/oxfordhb-9780199658626-e-8|language=en|access-date=8 December 2018|archive-date=25 December 2018|archive-url=https://web.archive.org/web/20181225013413/http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199658626.001.0001/oxfordhb-9780199658626-e-8|url-status=live}}</ref><ref>{{Cite web|url=http://www.financeinstitute.com/blog/the-history-of-investment-banking/|title=The history of investment banking|website=www.financeinstitute.com|date=10 September 2015|language=en-US|access-date=8 December 2018|archive-date=9 December 2018|archive-url=https://web.archive.org/web/20181209082745/http://www.financeinstitute.com/blog/the-history-of-investment-banking/|url-status=live}}</ref> Meanwhile, Asian cities are receiving a growing share of M&A activity.

According to estimates published by the [[International Financial Services London]], for the decade prior to the [[2008 financial crisis]], M&A was a primary source of investment banking revenue, often accounting for 40% of such revenue, but dropped during and after the [[2008 financial crisis]].<ref name=IFSL2010/>{{rp|9}} Equity underwriting revenue ranged from 30% to 38%, and fixed-income underwriting accounted for the remaining revenue.<ref name=IFSL2010/>{{rp|9}}

Revenues have been affected by the introduction of new products with higher [[margin (finance)|margins]]; however, these innovations are often copied quickly by competing banks, pushing down trading margins. For example, brokerages commissions for bond and equity trading is a commodity business, but structuring and trading derivatives have higher margins because each [[Over-the-counter (finance)|over-the-counter]] contract has to be uniquely structured and could involve complex pay-off and risk profiles. One growth area is [[private investment in public equity]] (PIPEs, otherwise known as Regulation D or Regulation S). Such transactions are privately negotiated between companies and [[accredited investor]]s.

Banks also earned revenue by securitizing debt, particularly mortgage debt prior to the [[2008 financial crisis]]. Investment banks have become concerned that lenders are securitizing in-house, driving the investment banks to pursue [[vertical integration]] by becoming lenders, which has been allowed in the United States since the repeal of the Glass–Steagall Act in 1999.<ref>{{cite magazine|last=Rickards|first=James|title=Repeal of Glass-Steagall Caused the Financial Crisis|url=https://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis|magazine=[[U.S. News & World Report]]|access-date=1 April 2014|date=2012|quote=In fact, the financial crisis might not have happened at all but for the 1999 repeal of the Glass–Steagall law that separated commercial and investment banking for seven decades.|archive-date=7 April 2014|archive-url=https://web.archive.org/web/20140407100807/http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis|url-status=live}}</ref>

=== Top 10 banks ===
{{further|List of investment banks#Largest full-service investment banks|Bulge Bracket#Membership}}
[[File:270 Park Avenue (WTM by official-ly cool 100).jpg|thumb|Many of the largest investment banks, including [[JPMorgan Chase]], belong to the [[Bulge Bracket]]. ]]
According to ''[[The Wall Street Journal]]'', in terms of total M&A advisory fees for the whole of 2020, the top ten investment banks were as listed in the table below.<ref>{{Cite web|title=Investment Banking Scorecard|url=http://graphics.wsj.com/investment-banking-scorecard/|access-date=4 July 2020|website=The Wall Street Journal|language=en|archive-date=26 June 2020|archive-url=https://web.archive.org/web/20200626213303/http://graphics.wsj.com/investment-banking-scorecard/|url-status=live}}</ref> Many of these firms belong either to the [[Bulge Bracket]] (upper tier), [[Bulge Bracket#Middle Market|Middle Market]] (mid-level businesses), or are elite [[boutique investment bank]]s (independent advisory investment banks).
{| class="wikitable"
|- valign="top"
! Rank
! Company
! Ticker
! Fees ($bn)
|- valign="top"
| align="center" | 1.
| {{flagicon|USA}} [[Goldman Sachs]]
| GS
| align="right" |287.1
|- valign="top"
| align="center" | 2.
| {{flagicon|USA}} [[Morgan Stanley]]
| MS
| align="right" | 252.2
|- valign="top"
| align="center" | 3.
| {{flagicon|USA}} [[JPMorgan Chase]]
| JPM
| align="right" | 208.1
|- valign="top"
| align="center" | 4.
| {{flagicon|USA}} [[Bank of America Merrill Lynch]]
| BAC
| align="right" | 169.9
|- valign="top"
| align="center" | 5.
| {{flagicon|UK}} [[Rothschild & Co]]
| ROTH
| align="right" | 94.6
|- valign="top"
| align="center" | 6.
| {{flagicon|USA}} [[Citigroup|Citi]]
| C
| align="right" | 91.8
|- valign="top"
| align="center" | 7.
| {{flagicon|USA}} [[Evercore]]
| EVR
| align="right" | 90.3
|- valign="top"
| align="center" | 8.
| {{flagicon|Switzerland}} [[Credit Suisse]]
| CS
| align="right" | 90.2
|- valign="top"
| align="center" | 9.
| {{flagicon|UK}} [[Barclays]]
| BCS
| align="right" | 71.7
|- valign="top"
| align="center" | 10.
| {{flagicon|Switzerland}} [[UBS]]
| UBS
| align="right" | 65.9
|}
The above list is just a ranking of the advisory arm (M&A advisory, syndicated loans, [[Equity (finance)|equity]] capital markets, and [[debt]] capital markets) of each bank and does not include the generally much larger portion of revenues from [[sales and trading|sales & trading]] and [[asset management]]. Mergers and acquisitions and capital markets are also often covered by ''The Wall Street Journal'' and [[Bloomberg L.P.|Bloomberg]].

{{bar box
|title=Global market share of revenue of leading investment<ref>[https://www.statista.com/statistics/271008/global-market-share-of-investment-banks/] {{Webarchive|url=https://web.archive.org/web/20180903183028/https://www.statista.com/statistics/271008/global-market-share-of-investment-banks/ |date=2018-09-03 }} ''statista'' Retrieved 17 October 2017</ref>
|titlebar=#DDD
|left1=institutions
|right2=percentage
|width=400px
|bars=
{{bar pixel|[[JPMorgan Chase]]|red|81||8.1}}
{{bar pixel|[[Goldman Sachs]]|green|69||7.2}}
{{bar pixel|[[Bank of America Merrill Lynch]]|blue|65||6.1}}
{{bar pixel|[[Morgan Stanley]]|orange|61||5.8}}
{{bar pixel|[[Citi]]|yellow|58||5.3}}
{{bar pixel|[[Credit Suisse]]|fuchsia|46||4.5}}
{{bar pixel|[[Barclays]]|aqua|43||4.3}}
{{bar pixel|[[Deutsche Bank]]|brown|34||3.2}}
{{bar pixel|[[UBS]]|silver|24||2.2}}
{{bar pixel|[[RBC Capital Markets]]|purple|22||2.2}}
|caption= (as of December 2017)
}}