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Investment BankingIt’s an investment banker’s job to keep their finger on the pulse of the financial markets and help organize large financial transactions. Investment banks raise capital for companies through transactions like IPOs (the sale of a company’s equity/shares) or debt financing and advise companies in mergers and acquisitions (buying and selling companies). Companies hire investment bankers to help organize huge, complicated financial transactions for their clients, including debt financing, initial public offerings, mergers, and acquisitions. The clients are typically large institutions such as corporations and governments. Today’s investment banking analysts often say they spend the vast majority of their roughly 95- to 120-hour workweeks perfecting PowerPoint decks and Excel sheets. Perhaps that’s partly why, for young college graduates, investment banking’s shine has dulled in recent years.Explore Investment Banking

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The shadow banking system is a group of intermediaries that operate outside of normal banking regulationsThe nonbank financial intermediaries that make up the shadow banking system legally provide services that are similar to those of traditional commercial banks. Although the term isn't used as often as it once was, private credit firms are technically part of the shadow banking system, as are hedge funds, payday lenders, buy now, pay later companies, and more. Encyclopedia Britannica Before the modern banking system, most lending resembled private creditBefore the creation of the modern banking system, the majority of loans were negotiated directly between the lender and the borrower—effectively making them private credit transactions. YouTube Near-universal banking masks a large underbanked shadow systemFDIC data indicates 128 million households have a checking account, the vast majority (96% in 2024). But more than 14% of households are underbanked, meaning they have accounts but also rely on nonbank services such as check cashing, payday loans, or prepaid cards. FDIC Fractional reserve banking creates deposits from loans, not the other way aroundThe traditional view of banking is that customers deposit money into the bank and the bank lends out those deposits. That's partly true, but most banks work by making loans first, which creates an asset on their balance sheet as a corresponding deposit. Banks often operate under a money multiplier ratio, lending out several times their total reserves. Investopedia The Erie Canal transformed New York City into America’s banking capitalBy redirecting western trade through New York Harbor, the canal turned New York into the nation’s commercial hub. This surge in commerce shifted financial power from Philadelphia to Wall Street, establishing the city as America’s banking capital. Encyclopedia of Greater Philadelphia Fintech could help democratize access to bankingMore than 1.3 billion adults worldwide do not have access to basic banking services as of this writing—but some experts believe that the fintech industry can help with that by targeting groups of people who have historically been underserved by traditional banks. UN Trade and Development (UNCTAD)BankFind is a tool that helps you find current and former FDIC-insured banking institutionsThe tool from the Federal Deposit Insurance Corporation (also known as the FDIC) allows users to search for these institutions by name, location, and more. FDIC Investment banking giant Lehman Brothers filed for bankruptcy in September 2008 when it had $619B in debt, making it the largest bankruptcy ever in the USNearly all of its 26,000 employees immediately lost their jobs. But in London, a few hundred remained tucked away, working for another decade to wind down the bank’s European business. Bloomberg Investment banking jobs are famous for their long hoursAlthough some banks report attempts to cap hours for junior employees at 80 hours per week, these employees often continue working many more hours than that. Goldman Sachs analysts, for instance, went viral back in 2021 when they put together a PowerPoint deck complaining of 100-hour work weeks and mental health struggles. The Financial Times It has historically been tough for minorities to rise through the ranks in investment bankingAccording to a Barron’s article, only about 1.3% of the $69T asset management business is managed by firms led by women or minorities—even if their performance is comparable to those led by white men. Barron's Some argue that investment banking could be a health hazardBack in 2012, a University of Southern California researcher published a decade-long study in which she observed investment bankers’ health. The results weren’t exactly stellar. Every individual the researcher observed developed a stress-related physical or emotional ailment within several years of working in investment banking. Wall Street Journal How AI is revolutionizing bankingGenerative artificial intelligence has left no industry untouched, and banking isn’t an exception. Experts estimate that gen AI could add as much as $340B in value to the banking sector each year. For consumers, this involves new features to prevent fraud and customer service chatbots. This report dives into the revolution underway and seeks to define a “full stack” AI bank of the future. Read more here. McKinsey & Company Master the banking basicsBefore deciding on a credit union, it’s important that you understand the basics. That way you can know exactly what’s happening with your hard-earned money behind the scenes. Flip through these flashcards to make sure you understand key terms like “deposit” and “checking account.” Then, you can read up on top banking products and start to find a credit union that works for you. Click here, then scroll down the page to find the cards. Investopedia Central banking in the US has had a fraught political historyThat history includes its doomed early efforts in the First and Second National Banks, as well as its failure to address the worst financial period in US history, the Great Depression. Investopedia From bartering to banking, temples to electronic transactions, here’s banking has evolved significantly since ancient timesA few historical facts about banking (like that one day, not long ago, certificates of deposit were physical pieces of paper) may not surprise you. But did you know that the church was the original lender? And that Julius Caesar himself invented foreclosure? Investopedia How banking worksTo do big things, people often need more money. Banks jumpstart economic activity with loans paid back with interest, and when things are working well, both people and the bank make more money. Formed in the Middle Ages amid competing currencies in Italy, banks—from the Italian for bench, banco—helped stimulate that era's commercial revolution, a massive expansion in Mediterranean trade and development. Find out the ins and outs of banks in this quick explainer video. YouTube American Express briefly owned Lehman BrothersIn 1984, Shearson, a retail banking company and American Express subsidiary, bought the investment banking company Lehman Brothers—best known for its historic 2008 collapse—for $360M. The businesses were then called Shearson Lehman/American Express. American Express spun off Lehman Brothers with an IPO in 1994 that attracted nearly $3B in new capital. TIME Two of American Express' co-founders also founded Wells FargoHenry Wells and William Fargo formed Wells, Fargo & Co. two years after American Express was created. Wells and Fargo saw an opportunity to expand the express delivery service from the East Coast and Middle America to the West Coast. The two initially asked the American Express board to expand operations, but the board declined, so they decided to create their own company. Today, Wells Fargo is among the top four largest banks in the US. HISTORY The dark web makes up about 0.01% of all the data on the internetThe surface web (5%-10%) consists of indexed sites—those traditional search engines have visited and stored so users can discover them via web search. The remaining 90%-95% makes up the deep web, which is not indexed and includes email and banking portals that require login credentials. The dark web is unindexed and requires anonymizing software to visit. Norton Some argue that advance payday apps aren't markedly different from payday loansSome apps, like EarnIn, allow users to get money from their paycheck in advance. These apps access users' banking information, allowing the company to immediately take back any borrowed money and track users' financial situations to evaluate their risk. Unlike traditional payday lenders, these apps often waive the right to sue users who don't pay back the initial principal and don't charge interest, but rather ask users for a tip. (Some users may experience a paywall.) The Atlantic Peter Thiel and Elon Musk formed PayPal after merging two dot-com companiesElon Musk cofounded "X.com," an online banking service, in 1999 with the idea that the web would become a financial repository as internet access expanded and became ingrained in daily life. Peter Thiel cofounded "Confinity" as a digital security service. In 2000, the two merged to form PayPal, and in 2002, they sold PayPal to eBay for $1.5B. TheStreet For every $100 you deposit, your bank puts a few cents in the FDIC insurance fundThis is a result of the 1933 Banking Act that established the Federal Deposit Insurance Fund. The law sought to prevent bank runs like those that decimated the banking industry amid the Great Crash and subsequent major depression. Today, individual depositors are insured up to $250K at each bank where they have an account. The Wall Street Journal The Medicis of Italy innovated 'bills of exchange,' precursors to checksAt the time, lending money for interest (also known as usury) was banned in much of the Christian world. The enterprising Medicis developed bills of exchange to allow merchants to promise payment without cash or coin (with some discrete means of earning interest woven in). Learn more about how this family laid the foundation for modern banking. Edology Hamilton created the First Bank of the United StatesAs Treasury secretary, Alexander Hamilton proposed the First Bank of the United States to stabilize national finances—serving as the government's fiscal agent, managing debt, and expanding credit through a public-private banking model. Investopedia Prompt viruses can exploit and take advantage of integrated AI systemsAI agents—software that can complete requested tasks without ongoing human direction—are expected to increasingly communicate with one another as users and businesses incorporate AI. Providing malicious, self-replicating instructions through prompt injection attacks can cause damaging commands to cascade across systems and services (e.g., banking), without requiring human intervention. Ars Technica The CD whose rates change based on Villanova basketball gamesArdent Credit Union in Philadelphia tied the interest rates of one of its certificates of deposit to whether Villanova won or lost a basketball game. A win moved the rate to 4.25%, while a loss reduced it to 3.9%. Financial experts say its only beneficial for a narrow group Investopedia The pedigree of one’s MBA program matters a lot to elite employersOne expert even said that having an MBA from a prestigious school is “non-negotiable” for certain employers, such as elite management consulting, investment banking, and private equity. Fortune The world spent up to $600B to avert the Y2K computer glitchEarly computer programmers used a two-digit code to record years rather than four. With the switch in the year 2000 from '99 to '00, analysts feared databases might fail and prompt outages and financial catastrophe. To prepare, governments and businesses spent an estimated $300B to $600B to mitigate the glitch. Investopedia Fintech relies on technology, not physical location, to serve financial customersMost of the industry's prominent players were created since 2010, and are still in a growth phase. These institutions have broadly disrupted traditional banking and have pushed physical banking locations toward obsolescence. McKinsey & Company The Erie Canal fueled a surge in westward settlementBy providing cheap, reliable transport to the interior, the canal made western lands more accessible. Farmers, traders, and immigrants moved into the Great Lakes region, accelerating population growth. HISTORY The 2024 Synapse collapse took $90M of people’s life savings with itIn 2024, a banking middleman called Synapse declared bankruptcy. Unfortunately, it also locked roughly 100,000 Americans out of their own money, which prompted a class action lawsuit. The Independent The BNPL industry boomed amid a surge in online shopping during pandemic-era lockdownsThe buy now, pay later industry allows consumers to buy something immediately and pay in installments without the need for lengthy application and approval processes or high credit scores—and fintech companies Affirm, Klarna, and Afterpay are leading the charge by targeting young adults. WSJ Key moments in fintech history include the transatlantic cable’s invention and E-Trade’s foundingFounded in 1982, E-Trade was the first-ever online brokerage, pioneering a method of investing that is common today. Its story is part of a timeline that the New York Times put together of key moments in early fintech history. The New York Times The process of electronic funds transfer was approved in the US in 1978An electronic funds transfer is the transfering of money from one bank account to another via computer-based systems. When it was first introduced, it was revolutionary. A video from 1980 aimed to explain the value of electronic funds transfer to consumers at the time. Computer History Archives Project ("CHAP")The first ATM—dubbed a 'cash dispenser'—was installed in 1967 in LondonSpecifically, the first ATM (which stands for “automatic teller machine”) made its debut at a Barclays bank in London. A timeline of ATM history can help illustrate and visualize other key events in ATM history. American Banker A star investment banker was fired, launching a decade-long court fightStar bankers are the core of an investment banking firm's business, so when Perella Weinberg let their restructuring guru Mike Kramer go in 2015, he sued, launching a ten-year legal fight. Behind the Money The origins of modern family offices date back to the 1500sWealth management for families with massive fortunes has evolved over the centuries, with the Rockefellers establishing the first single-family office in 1882. National Law Review Sears once tried to become a tech companyIn 1984, Sears arguably created one of the first online retail services, called “Prodigy,” in 1984 alongside IBM and CBS. But it was more of a WeChat than an Amazon, offering a variety of other services to users a few years before the dot com era. Chicago Magazine The total cost of owning an ETF is the sum of the holding costs and the transaction costsHolding costs include things like the expense ratio, or the annual fee that a fund issuer charges. Transaction costs include things like brokerage commissions, or the fee that a broker charges to enact a trade. However, in recent years, most brokers have essentially eliminated commissions on ETF trading. Morningstar, Inc.The rebrand to X was to make Twitter an all-in-one social media appElon Musk renamed the platform as part of his plan to create an app that goes beyond posts and tweets. The rebrand included a new name, logo, and vision for a platform that offers messaging, video, banking, shopping, and more. Buffer JP Morgan Jr. once angered the nation with his zero-dollar tax billIn the aftermath of the Great Depression, Congress learned that Morgan and his banking partners had avoided paying any federal income tax in 1931 and 1932. By claiming their losses in the stock market, they seemingly erased what they owed. Tax Notes Investment bankers are architects of the largest financial transactions in the worldWorking up to 120 hours a week, investment bankers help major corporations navigate IPOs, mergers, and more. Despite long hours and a high-pressure environment, investment banking remains a critical industry that shapes the global financial landscape. 1440 Daily Digest League tables show the number of deals top investment banks do in a time periodThese tables provide a visual to help keep track of the leading companies in investment banking. Companies such as JPMorgan and Goldman Sachs typically sit up top. Financial Times Ten people on Goldman Sachs’ 31-person senior management committee are womenHowever, only two of those 10 women were in charge of a revenue-generating business arm. Learn more about what it’s like to be a woman in investment banking—and about Goldman’s recent gender discrimination settlement. The Financial Times What do investment bankers actually do?Investment bankers organize large financial transactions at a high level. But what does that look like day to day? A video breaks down the specifics about the transactions and deals investment bankers work on, and which members of an investment banking team have eyes on each project. How Money Works Entry-level investment bankers boast $200K paychecks, but it's not all base salaryThese days, a first-year analyst typically makes closer to $100K per year as their base salary, but is eligible to receive significant bonuses on top of that. Wall Street Prep Many investment bankers work on mergers and acquisitionsAt some point in their careers, many investment bankers work on facilitating or advising clients on mergers or acquisitions. From analyzing industry group trends to deal negotiations, an M&A in investment banking explainer outlines how investment bankers handle these business transactions. DealRoom It’s an investment banker’s job to raise money for the bank’s clientsInvestment bankers do this in a multitude of ways, such as selling securities, or acquiring other companies. Investopedia The concept of CDs dates back to the 1600s in EuropeBanks in the US started issuing CDs in the early 1800s as the banking system began to take shape following the Revolutionary War. The federal government did not formally insure CDs until the FDIC was formed in 1933. Investopedia The Federal Reserve is the most powerful financial institution in the USThe Fed controls the money supply, determines interest rates, and regulates the banking system. Established in 1913 after a volatile series of financial panics, the central bank has managed to retain its legitimacy despite broad critiques against its obscure and independent decision process. Council on Foreign Relations

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