What type of banking is primarily involved in organizing large financial transactions such as mergers and IPO underwriting?

Investment banking is primarily involved in organizing large financial transactions, including mergers and acquisitions (M&A), as well as underwriting initial public offerings (IPOs). The role of investment banks is to facilitate these complex financial arrangements by providing advisory services, acting as intermediaries, and raising capital for corporations, governments, and other entities through the issuance of securities.

In the context of mergers, investment banks analyze potential business combinations, assess the value of the companies involved, and help negotiate terms to arrive at mutually beneficial agreements. When it comes to IPOs, investment banks assist companies in going public by determining the initial offering price, underwriting the shares, and marketing them to potential investors.

This function is distinct from retail banking, which serves individual consumers and small businesses with deposit accounts and personal loans; commercial banking, which primarily deals with business loans and deposit services for businesses; and private banking, which offers personalized financial services to high-net-worth individuals. All of these banking types focus on different aspects of financial services, but investment banking is uniquely tailored to facilitate large-scale financial transactions and capital market operations.