Whereas commercial banks take deposits from some customers and make loans to other customers, the principal activities of investment banks are (1) to help firms issue new stock and bonds and (2) to give firms advice with regard to mergers and other financial matters.However, financial corporations often own and operate subsidiaries that operate as commercial banks and others that are investment banks.This was not true some years ago, when the two types of banks were required by law to be completely independent of one another.

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The statement is true. In the past, commercial banks and investment banks were required to be completely independent, but financial corporations now often have subsidiaries that operate as both types of banks.

Whereas Commercial Banks Take Deposits from Some Customers and Make