12. Difference in Commercial Banking, Merchant Banking & Investment Banking COMMERCIAL BANKS: “A commercial bank takes deposits for checking and savings accounts from consumers and the bank loans that money to consumers and companies in need of capital (cash)” “Commercial banking is the day to day business banking of a client.” INVESTMENT BANKS: “An investment bank raises money by selling securities to companies and to the government. They also provide advice to corporations about mergers and buyouts.” “Investment banking is all dealing in IPOs, shares, and mutual funds” MERCHANT BANKS : “Merchant banks tend to operate on small-scale companies and offer creative equity financing, bridge financing, and a number of corporate credit products”
13. Importance of Investment Banking For corporations- raising its capital. It facilitates the trading of securities thereby, increasing the liquidity of the securities. For Individuals- It provides investment opportunities to the individuals or entities. Most of the corporations get advisory services from the investment banks regarding the mergers, acquisitions and divestiture.