Unlike a commercial bank, which offers checking accounts, CDs and loans, an investment bank finances offerings of stocks, bonds and other investments.
Investment banks help companies sell their stock to the public and help cities and towns raise money by issuing municipal bonds. Investment banks also offer advice on corporate mergers and acquisitions. If investment banks can’t function, the financial system could grind to a halt. Companies and municipalities would have a hard time raising money. Businesses would be unable to expand and create jobs, and municipalities would find it difficult to fund construction projects, such as roads, bridges and airports, or just finance ongoing operations.
(courtesy of USA Today)
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