Q. It would be best if you could explain it with an example. What do they offer to customers and what do they get in return? Also i want to know what are retail banks and how do they work?
A. Investment banks collect a large number of small accounts and invest the money in companies that require capital. Hopefully their expertise in the market will mean that these companies make lots of money and pay nice dividends when the money has been invested in stock and high interest where the money has been loaned. This forms the income for the investment bank. In return they pay returns on the smaller accounts at a lesser rate. The difference is their profit.
Retail banks are the ones that you see on the high street, offering current and savings accounts for day to day use by business and individuals. They earn their money by lending at a higher rate than they pay to depositors.
Retail banks are the ones that you see on the high street, offering current and savings accounts for day to day use by business and individuals. They earn their money by lending at a higher rate than they pay to depositors.
Powered by Yahoo! Answers
No comments:
Post a Comment