What is a bank?
A bank is a licensed and that lends , accepts deposits and carries out other financial transactions for its clients.
There are three main types of bank:
- InvestmentInvestment is the commitment of money or capital to purchase... More banks
- Retail banks
Investment bank
Investment banks, sometimes called wholesale banks, provide financial services to other financial institutions and corporates, and occasionally to countries.
A key role is the issuance of for a , either through an or a secondary issue, in orderWhat is a trade order? In trading, an order can be defined... More to raise capital for expansion. Investment banks also provide loans, often for millions of dollars, to companies that prefer as a means to raise capital. This is also known as merchant banking.
Other tasks include providing investment advice to and broking on behalf of institutional and acting as an intermediary where a client is engaged in mergers and acquisitionsMergers and acquisitions (commonly abbreviated to M&A) ... More. Many investment banks have their own trading floor, where their staff can buy and sell securities on behalf of their clients. They also manage pension and other large .
Investment banks are usually regulated by the central bankWhat is a central bank? A central bank is an institution r... More of the country in which they operate and/or specific regulatory authority.
Retail banks
Retail banks, also called commercial banks or “high street” banks, provide banking services to members of the public.
Examples of retail banking services:
- accepting salaries and wages into a current account
- acting as an intermediary to pay bills through direct debits and standing orders
- providing cheque books, credit and debit cards
- providing cash withdrawal facilities
- managing savings
Many retail banks also offer a wide range of other financial services to their customers, such as insurance, pension funds, , overdrafts and broking investments in the . All these services, plus business loans, are also available to small and medium-sized businesses.
The regulation applies to retail banks, too. They are usually overseen by the appropriate regulatory authority, but the central bank may still set policy for them.
For a traderWhat is a trader? A trader is a person who buys and sells... More, are often a better alternative to banks for facilitating trades and investments. The reasons are often lower and better specialisation and supportWhat are "support levels" in trading? A support level is a... More of .
