Investment banking is an advisory-based financial service provided primarily to corporations, governments and institutional investors, distinct from the deposit-taking business of commercial and retail banks. Investment banks raise capital for clients by underwriting or acting as agent in the issuance of debt or equity securities, advise on mergers and acquisitions, and engage in market making and trading of derivatives, equities and fixed income, currency and commodity instruments, often alongside prime brokerage and asset management divisions. Because investment banks do not take deposits, their revenue comes primarily from fees for advising on transactions rather than interest income; in the United States the Glass-Steagall Act separated investment banking from commercial banking from 1933 until its repeal in 1999, after which many banks became universal banks combining both businesses.
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