commercial and investment banks

Question 1

differences between commercial and investments

Answer 1

-commercial:accept savings and lend act as financial intermediaries, allow payments from one agent to another, advice
-investment banks: propriety trading (excess capital and buy financial assets), market making (ensure markets can exist bonds shares bought and sold), mergers and acquisitions (go through advice: when, due diligence, paperwork)
-new issues (bonds finance to raise help, find people to sell on behalf)

Question 2

systemic risk

Answer 2

-whereby failures on one side bring down the other side (commercial and investment banks)