U.S. investment banks - the basis of

In the middle of the XIX century. in the U.S. banking system emerged as a particular link in the investment bank specializing in the placement and sale of securities. In the future, before the crisis of 1929-1933., The boundaries between investment and commercial banks increasingly erased, as in the XX century. Commercial banks have also become actively involved in the issue and placement of securities themselves invested heavily in these securities.

 After the crisis of 1929-1933. the scope of commercial and investment banks were legally (according to the law in 1933) delineated. In today's investment banks are under almost nine tenths of the securities the U.S. federal government, state and local governments. With regard to the securities industry and other companies, their production and deployment of investment banks involved.
 Investment banks provide two main types of securities transactions:
 1) guarantee the issuance of securities (underwriting transaction), when the bank guarantees to companies that produce these documents, their location, and shall at his own expense to purchase those securities that the companies can not be placed on the market;
 2) direct placement of securities companies. In the latter case, the investment banks to buy stocks and bonds of companies, and then place them on the market. At the same time investment banks widely use the funds they receive in loans from commercial banks for investment in securities. Thus, although the commercial banks do not have the right to purchase such shares of industrial corporations, but indirectly - through loans of commercial banks to investment banks - commercial banks' resources actually invested in these stocks.
 The form of organization of some investment banks are corporations (public companies), others - unincorporated firms or partnerships, which include a limited number of partners.