Differences for finance companies and commercial banks include:

Question

Quizplus · Accepted Answer

All of the above statements are correct. Finance companies are less regulated than commercial banks and do not have deposits like traditional banks. They often take on more risky customers that do not qualify for bank loans and charge higher interest rates to compensate for the increased risk. However, because they do not have deposits, they have less liquidity risk than commercial banks but may have more interest rate risk.

Differences for Finance Companies and Commercial Banks Include