An investment bank is large, complex, and has many facets. In order to best understand the investment banking interview process, it is important to first give an overview of the major investment banking departments operating within an investment bank and the major roles within each department. This will help a job seeker identify and better understand the roles sought after in an investment bank and the most popular areas of interest for job applicants. Note this is just a high-level overview; you will always find more departments as you dig deeper, and each bank may slightly vary.
It is first important to highlight the difference between an investment bank and a commercial bank. An investment bank underwrites securities and performs advisory services while a commercial bank accepts and manages deposits for businesses and individuals.
In 1933 the United States issued the Glass-Steagall Act that prohibited banks from performing both “investment banking” and “commercial banking.” This act was set up in response to the Stock Market Crash of 1929 in order to prevent banks from betting on the market at the expense of depositors. This act was repealed, however, in 1999.
The following chart highlights the major banking divisions I will explore. Again this is not meant to be a complete overview, but just the key areas. These descriptions are meant to be a very brief overview just to give you enough of an idea to differentiate between divisions ...