Investment Banking 101 Exam Solved 100%

what are the 2 main differences between investment and commercial banks? - Answer 1) there is no cheap financing for investment banks (client deposits) 2) investment banks work on large scale and sophisticated transactions banks that perform commercial and investment banking services are called __ - Answer universal banks Glass-Steagall Act 1933 - Answer Universal banks have more information about both sides (commercial and investment side), this creates a risky situation because banks may be tempted to sell risky position that would easily result in losses. This would cause a hit in their reputation, but would prevent the banks from losing its own money. Due to these concert, the Glass-Steagall Act was introduced, which prohibited commercial banks from offering investment banking services. The act was repealed 66 years later, allowing banks to sell commercial and investment banking services. --> Global financial conglomerates: - HSBC