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The concept of investment banking is widely known factor in the financial market and this is also considered to be one of the leading factors shaping the functioning and the growth of the entire sector. The main function of the investment banks is to the act as the intermediator in the capital market and facilitating the flow of fund from the group of investors and lenders of the market to the business houses which are playing the role of primary debtors group. Thus, the investment banks are acting as the critical agent and facilitating the formation of the capital and the setting of the price in the financial market (Ashdown, 2002). The investment banks control entire consumption of the present and the future period as well as properly coordinated in the market. There are various researches conducted on the study of the role played by the commercial banks in the development of the society or the financial system. However, in the meanwhile from the introduction of 'investment banking system', the definition banking system has changed and this is far beyond that just the conventional meaning of banking. Therefore, this research would be dealing with the study of the role of played by the investment banking from the context of economic development.
From the introduction of the system of investment banking the scenario of the capital market has changed to a considerable level and the flow of fund transfers have also enhanced from before and facilitating the channelization of the fund from the savers to the group who are in need of capital or borrowers. Therefore, meeting with the fund requirement of the 'business sector' or any other sector is very vital from the view of resulting in economic and the infrastructural developments of the country or on the global floor. The flow of the fund and the use of the same in the productive manner leads to the growth of the business sector and of the growth of the other sectors associated (Bryfonski, 2010). However, there are several debates resulted due to the growth of the investment banks in the sector of finance, as a group of financial economists stated that by the introduction of investment banking system the financial market has become all the more dynamic than ever before, but on the other hand there are also researchers stated that the growth of the 'investment banking system' has further made the market all the more volatile.
The investment banking system is acting as the facilitator of trade and commerce promoting the growth of the business sector by the way of enabling the business owners and the business managers to raise funds from the market in order to meet with the requirement of the business capital and other financial requirements of the business for the purpose to help develop the business. The investment banking systems are facilitating the trading on the securities and the flow of cash within the economy. The investment banking organizations are not only enabling the business sector to grow by the way of meeting with the financial requirements on time, but at the same time, these organizations are also enabling the household sector or the market investors to get the higher rate of return from their investments in the business sector (Deng, 2011).
Investment banks are also known well for their assistance provided to the government at the time of financial requirements. The investment banks also assist several companies in the process of issuing the stocks and bonds in currency market during the process of mediating financial securities and debt instruments in the market and they are often known as acting like the agents in a particular target market.