Introduction to Investment Banking
Market Participants
Learning Outcome
5
Understand the importance of regulation
4
Learn how intermediaries support markets
3
Recognize different types of investors
2
Understand the role of issuers
1
Identify key market participants
Story — Marketplace Ecosystem
Imagine a marketplace:
A producer sells goods
Buyers purchase them
Agents facilitate transactions
Authorities enforce rules
Financial markets work the same way.
Core idea:Each participant has a defined responsibility.
Why Market Participants Matter
Markets become unstable
Trust disappears
Without structure:
Capital flow stops
Why Market Participants Matter
Investment
access
Participants create:
Funding opportunities
Operational structure
Regulatory
protection
Participant 1: Issuers
Who Are Issuers?
Purpose: Obtain funding for expansion or projects.
Key idea: Issuers generate investment opportunities.
Issuers are entities that create financial securities to raise capital.
Examples:
Startups raising equity
Governments issuing bonds
Corporations issuing shares
Participant 2: Investors
Who Are Investors?
Investors provide capital expecting returns.
Core idea: Investors fuel market liquidity.
Mutual funds
High-net-worth individuals
Retail investors
Pension funds
Types include:
Goal: Earn profit through dividends, interest, or appreciation.
Participant 3: Financial Intermediaries
Role of Intermediaries
Intermediaries connect issuers and investors.
Investment banks
Brokerage firms
Asset managers
Example:
Participant 3: Financial Intermediaries
Functions:
Key idea: They ensure smooth market functioning.
Structuring deals
Underwriting securities
Facilitating trading
Participant 4: Regulation
Why Regulation Exists
Regulators maintain fairness and transparency.
Protect investors
Prevent fraud
Ensure compliance
Functions:
Participant 4: Regulation
Examples:
Market oversight
Disclosure requirements
Core idea: Trust sustains markets.
Real-World Integration
Healthy markets require:
Investors → provide capital
Intermediaries → facilitate transactions
Issuers → create opportunities
Regulators → maintain fairness
Insight: Collaboration ensures stability.
Summary
4
Regulation builds trust
3
Intermediaries connect markets
2
Investors deploy funds
1
Issuers raise capital
Quiz
Issuers primarily:
A. Buy securities
B. Create securities
C. Regulate markets
D. Trade derivatives
Quiz-Answer
Issuers primarily:
A. Buy securities
B. Create securities
C. Regulate markets
D. Trade derivatives
