The aim of this study is to assess the contributions of investment banking to productivity and growth of the German economy. To this end we will analyse both the economic benefits and the risks stemming from investment banking. The last financial crisis has shown the negative impacts of banks on the financial system and the whole economy. Nevertheless the rescue packages financed by the public made also clear that banks are an essential part of the economy which contributes significantly to the functioning of modern economies. The study will focus on investment banks as this part of banking is particularly relevant for financing companies and business activities. The assessment of benefits and costs of investment banking will be done from a European perspective. Nevertheless there will be a focus on the German economy to allow a more detailed analysis. For comparison purposes other European countries and also the U.S. may be taken into account. As the financial crisis has made the systemic risks of banking activities evident there is an ongoing process of reforming banking regulation to reduce the risk of future systemic crises. In this study we will also try to assess how these regulatory changes will impact the banking business and its ability to finance companies in Germany. This also includes an analysis of the rationale and effects of additional governmental measures such as taxes aimed to influence banking activities.