The investment bankers keep the news of capital market all the time which is quite difficult job and they must have the knowledge of share-market too (Suzy, 2008).
To remedy this situation and maintain credibility and a reputation for probity indispensable to their survival, the investment banks, with the help of legislators and supervisory authorities, set up various mechanisms of their separation and isolation activities to maintain the sometimes conflicting interests, but these are very complementary (Mracek and Beaumont, 2009). The device called the “Chinese Wall” is one of them. This is to ensure the perfect seal between the various services on the movement of sensitive information. It relies on the commitment to integrity of “insiders” (who incur severe penalties for failure), as well as various internal control (restricting access to information to the smallest number of stakeholders as possible, monitoring of their internal and external trade, etc.) (Straub, 2007). Most banks offer investment advisory services for mergers, acquisitions or divisions and other financial services to clients such as trade or placement to future income, debts, stocks or commodities. Generally countries require special licenses for investment banks and do not allow to general banks to operate simultaneously as commercial banks (Subramanyam, 2010). The mutual funds, hedge funds and funds from retirement, aim to maximize the return on depositors by investing up the “buy side” of the securities issued and sold by investment banks. In some countries, firms operate both the buy side, and the sale (DePamphilis, 2008).
A lot of tasks are needed to be done by the investment bankers. It includes financial engineering which consists of complicated processes with financial transactions. This is a time taking matter and they also need to engage themselves in insider trading. They also need to maintain all kinds of information of their clients which includes companies, investors etc. They also organize pool financing for their clients. All these jobs are quite difficult and they should be done appropriately without any mistake. For all these reasons the investment bankers are paid high and they also get various kinds of bonuses so that they can be motivated towards their work.