Investment banks accept long-term savings deposits and use them to fund short-term loans to businesses.

Question

Quizplus · Accepted Answer

Investment banks typically specialize in providing short-term financing, such as underwriting and issuing securities like stocks and bonds, and advising clients on mergers and acquisitions. They do not typically accept long-term savings deposits or make long-term loans to businesses. That is the role of commercial banks, which specialize in traditional banking activities such as deposit-taking and lending.

Investment Banks Accept Long-Term Savings Deposits and Use Them to Fund