What is the difference between investment banking and other types of banking?

Professor Johnson explains that the difference between investment banking and other types of banking is how money is transferred between entities: commercial banks take in deposits and use that money to fund loans for other clients. In contrast, investment banks raise capital by selling stocks and bonds.

What is investment banking?

Investment banking is a part of the financial services sector whose primary customer base is smaller than commercial banking. Clients include pension funds, corporations, governments and other financial institutions.

What is the difference between investment banking and commercial banking?

Investment banking primarily acts as a broker between entities who want to get into a financial arrangement like dealing in the purchase and sale of the stock, Mergers, acquisitions, and helping in the initial public offer. In contrast, commercial banking provides services concerning taking deposits and giving loans to individuals and companies.