USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at

Q: What role do investment banks perform in markets?

A: Investment banks are the grease that keeps financial markets, often behind the scenes, moving.

The term investment bank means different things to different people, but at its very core the job of these institutions is to get money from people who have too much of it and are looking for a return to those who have ideas, but not enough cash. Investment banks shift cash from investors to entrepreneurs typically by selling securities stock as stock and bonds.

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Investment banks play the role of selling, or underwriting, shares of new companies in the process of the initial public offering. They also handle the process of companies selling debt to investors. Investment banks also serve the role of selling these securities, by writing research on the prospects for stocks and bonds.

Meanwhile, investment bankers also operate trading desks. These parts of the business buy and sell securities using proprietary methods that attempt to find securities that are incorrectly priced, even for a nanosecond.

Given all the areas investment banks are involved in, there's a constant concern of conflicts of interest. And investment banks have been accused many times of not serving the interests of one client in order to help another. Despite the problems, though, investment banks remain a key part of how our system is funded and operates.