There are two widely recognized functions of investment banks: trading and generation of capital. These functions are distinct from the role of commercial banks that take deposits and create loans. Investment banks are valuable agents of capital development and price setting. They also assist in the management of current and future consumption. In modern mixed economies, large corporations and governments depend on investment banks to generate capital. The banks specialize in creating an avenue through which producers can trade with investors.
Brief history of the investment banking of the United States
While the role of commercial and investment banks are distinct and clear across the globe, the distinction between these two forms of banking has a strong meaning in the U.S. than other parts of the world. The U.S. Congress imposed the Glass-Steagall Act in 1933. One of the clauses of the Act formed a legal difference between the running of commercial bank and investment bank. Furthermore, one company could not be allowed to hold both commercial and investment banks. The act prevented investment banks from accepting deposits or making loans. Commercial institutions could not invest in securities in the U.S. In 1999; the Congress passed another law called the Gramm-Leach-Bliley Act, which eased the barriers. The United States goes to history books as the only nation to have ever created a legal distinction between commercial and investment banking.
Martin Lustgarten is one of the greatest minds in the circles of investment banking. He has been dealing with individual and organizational clients. Formerly, Lustgarten held citizenship of Austria and Venezuela. He took advantage of his dual citizenship to expand his investment banking empire in those two nations. He has been consistently advising his clients to spread their investments across distinct sectors. Lustgarten is a global investor. Therefore, he benefits from both local and international growth.
Lustgarten has managed to establish a pool of loyal investors who rely on his services. His deep-rooted mastery of investment banking and his tendency to observe the market keenly, allows him to make an adjustment when a market is nearly making a downturn. Lustgarten is the founding director of the Miami-headquartered Lustgarten Martin Investment Banking.