Investment banking
The importance of investment banking grew during the late 20th century, because of the growing demand for investment services, technological changes, deregulation, and globalization. Investment banks were at the heart of the shadow banking system. They invented many of the financial products used, often disguising its operation. Investment banking played a major role in the outbreak of the global financial crisis of 2007–9. In the aftermath, leading American investment banks were converted into bank holding companies, and brought under new regulations. One result is the recent rapid growth of alternative financial institutions, especially long-time-horizon institutional investors, sovereign wealth funds, pension funds, and other beneficiary institutions not located in New York or London.