Impact of the Global Financial Crisis on the Investment Banking Industry

Investment banking industry is one of the most dynamic sectors of finance. In addition, it has experienced dramatic changes since 2008. Three of the top five investment banks in the United States have disappeared while Goldman Sachs and Morgan Stanley have converted their structures from pure investment banks to financial holding companies. Capturing their reshaped business plans in the wake of the 2007-2009 global meltdown and recent financial regulation overhaul, this paper reveals their key functions, major banking activities, compensation systems, role in wealth creation and risk management. Furthermore, the paper describes these very closely related banks, their impact on the global financial market, principal activities, regulatory environment, risks and opportunities, trends and challenges in the post-crisis world The paper finds that investment banks are now even bigger and stronger than in the pre-crisis period This claim is based on monitoring and analyzing of selected financial indicators over five years period