Retail V Investment Flashcards
What is retail banking?
Relates to financial services provided to consumers and is small-scale in nature.
Commercial banks: major financial intermediary - deposits and lending - retail and corporate customers
Savings banks: similar to commercial banks but ownership tends to be by “members” or “shareholders” - they are the depositors and borrowers
Cooperative banks: similar to savings, mutual ownership
What is investment banking?
Investment banks help companies and governments raise funds in the capital market either through the issue of stock (equity or shares) or debt (bonds).
Main difference between commercial and investment banking?
Commercial refers to deposit and lending whereas investment relates to securities underwriting and other security related business.
Commercial: cash management, payments and credit
Investment: equity and debt to finance company expansion, risk management products and advice on mergers and acquisitions
