2.4.2 Commercial banks and investment banks

• What are commercial banks and what is their primary purpose?

  Financial institutions providing loans
• One of the main functions of commercial banks is accepting deposits
• What is the role of payment services provided by commercial banks?

  Facilitate transactions
• Match the type of bank with its primary focus:

  Commercial Banks ↔️ Accepting deposits and lending

  Investment Banks ↔️ Underwriting securities and advisory services
• What is the primary focus of commercial banks?

  Deposit-taking and lending
• Investment banks serve large corporations and governments as clients.


  True
• Commercial banks accept deposits from the public to provide a safe place to store money
• What role do commercial banks play in payment services?

  Facilitate transactions
• Investment banks are less regulated than commercial banks.


  True
• Commercial banks engage in key activities such as deposit-taking, lending, and payment services
• How is the regulation of commercial banks compared to investment banks?

  Heavily regulated
• What type of services allow commercial banks to facilitate transactions and payments?

  Payment services
• Investment banks primarily focus on underwriting securities and advisory services
• Match the aspect with the correct bank type:

  Primary Focus ↔️ Accepting deposits and lending

  Key Activities ↔️ Deposit-taking, lending, payment services

  Clients ↔️ Individuals and small/medium businesses

  Regulation ↔️ Heavily regulated for stability
• What is the primary client base of investment banks?

  Large corporations and governments
• Investment banks advise and facilitate mergers and acquisitions to help companies expand or restructure.
• Order the main functions of commercial banks:

  1️⃣ Accepting deposits

  2️⃣ Lending

  3️⃣ Payment services
• Investment banks are heavily regulated for stability like commercial banks.

  False
• Commercial banks primarily focus on accepting deposits and lending
• What is one key role of commercial banks in the economy?

  Deposit-taking
• What type of transactions do commercial banks facilitate?

  Electronic transfers
• Investment banks primarily serve individuals and small businesses.

  False
• Investment banks engage in activities like IPOs and mergers and acquisitions
• What are the core functions of investment banks?

  Underwriting, M&A, financial advice
• Investment banks cater to large corporations and governments
• What is the primary focus of commercial banks according to their business model?

  Accepting deposits and lending
• Commercial banks provide loans such as mortgages and business loans.

  True
• Investment banks focus on activities like underwriting securities
• Commercial banks provide loans to stimulate economic activity.


  True
• Key activities of investment banks include mergers and acquisitions
• Why are commercial banks heavily regulated?

  For financial stability
• Commercial banks use deposits to provide loans, stimulating economic growth.


  True
• Match the type of bank with its key activities:

  Commercial Banks ↔️ Deposit-taking, lending, payment services

  Investment Banks ↔️ Mergers and acquisitions, IPOs, trading
• What is the primary focus of commercial banks?

  Accepting deposits and lending
• Commercial banks primarily serve large corporations and governments.

  False
• Commercial banks provide loans to stimulate economic activity and capital formation.
• Investment banks focus on activities like underwriting securities and mergers and acquisitions.


  True
• What is the key activity of investment banks that commercial banks do not focus on?

  Mergers and acquisitions
• Commercial banks are focused on traditional banking activities, while investment banks specialize in financing and advisory services
• Underwriting securities involves issuing and distributing stocks and bonds.


  True