The author deals with capital markets and investment banking in Poland. He adopts a broad definition of an investment bank that includes brokerage houses active on the financial markets. The Polish capital market is currently going through a bad period, which is best illustrated by the financial performance of brokerage houses and the investors' mood. Indeed, this segment of the financial market has been in difficulty since the second quarter of 2000. There are a number of explanations for this situation and the author has identified the major causes of the capital market slump. The original legal regulations for the capital markets were too restrictive. While, on the one hand, this 'over-regulation' protected the young market from the dangers of unequal investor treatment, on the other brokerage operations were excessively restricted and the market was unable to develop freely. Subsequent governments used the stock exchange principally as a tool in the privatisation process. They overlooked the opportunity to promote the capital market among small and medium sized enterprises and there are insufficient new listings at the moment. Difficulties of the Polish economy, global economy stagnation and accounting scandals are all reflected by the securities market. One can only hope that, as the condition of Polish companies improves and legal regulations expected by the market are put in place, there will be a revived interest in trading on the Warsaw Stock Exchange.