'An Investigation Into the Differences Between Retail and Investment Banks Essay\r'

'Over the past decades, sell swans have remained the main commercial dep wiz for consumers, earlier than corporations or otherwise commits. The investing bank has work more than(prenominal) than popular amongst individuals, corporations and governments which ar engagemented in raising their profits. Retail banks and enthronization banks have contrasting organizational structures and activities. So they have many differences, much(prenominal) as run, customers and profits. And this report aims to distinguish between the sell bank and the enthronization bank in crop to identify their specific service areas. Firstly, the author give review some literature focusing on the definitions.\r\nSecondly, the author will illustrate the differences between them from their fundament activities and functions. Retail banks offer a range of service to individual customers and small businesses, rather than to large companies and other banks. These include: savings and transactio nal accounts, mortgages, personal loans, debit card game and credit cards. An enthronisation bank is a bank which specializes in providing funds to corporate borrowers for startup or expansion and does non accept deposits but provides operate to those who offer securities to investors, and to those investors themselves.\r\nIt may as well assist and hold back companies which are involved in mergers and acquisitions, and provides ancillary go such as market making, trading of derivatives, frigid income instruments, orthogonal exchange, commodities, and equity securities. From the definitions above, it clearly shows that the two types of bank provide substantially different services to customers. As a sane customer, I intend the sell banks are demote than the investment banks. And there are three advantages of the retail banks. Firstly, the retail banks have more branches than the investment banks.\r\nFor example, Lloyds TSB Bank is a retail bank in the United Kingdom, and according to Lloyds TSB website, the bank has roughly 1,900 branches across the UK. This means that you skunk come about the branches of TSB approximately everywhere. So you locoweed deal with some normal business easily, the branches of retail banks stack be set in motion nearly everywhere. For example, you pauperism to irritate emergency loans, you do not have enough time to find an investment bank to make loans, so you moldiness choose the retail banks. Moreover, the retail banks bottom make out some services which the investment banks do not provide.\r\nWhen you want to transfer from one account to some other account, you can not go to the investment banks, because the investment banks do not offer this kind of service. Therefore, if you want to deal with some normal business (such as savings, mortgages and credit cards) at a bank, it would be let out to choose the retail banks. The Royal Bank of Scotland is one of the retail banking is part of the Royal Bank of S cotland Group, and in concert with NatWest and Ulster Bank, provides branch banking facilities throughout the UK. And it can provide almost every service that the retail banks have.\r\nSo it has a good reputation in Scotland. Finally, the risk of retail banks is relatively lower than the investment banks. You can need money from the rate of interest which can be high than the other banks. Such as Barclays embodied which belongs to the Barclays Group and provide these kinds of services (such as savings, transactional accounts, mortgages, debit cards, credit cards). It offers a service called monthly savings which is its regular savings plan that allows you to cede regularly over 12 months, and you can get higher interest rates are paid where no withdrawals have been made in the previous month.\r\nThis means that you can get high fixed interest of up to 3. 25% AER / 3. 20% in months when no withdrawals are made. And the revenue of the retail banks is stability and fixed. So you do not need to pay more attention to the asset in the retail banks. These advantages of the retail banks are the reasons why the retail banks are better as a normal customer. As an in advance(p) person or a company, I think the investment banks are better. There are also many advantages of the investment banks which usually provide services for the company.\r\nFirst of all, most of the investment banks are worldwide company and it can provide services more widely than the retail banks. Such as Morgan Stanley is a leading global financial services wet providing a wide range of investment banking, securities, investment management and wealthiness management It reports US$779 million as assets under its management. Its headquarter located in Midtown Manhattan , upstart York City. It has companies in 37 countries with over 1,200 offices, employees dedicated to topical anesthetic businesses, government agencies, institutions and individuals.\r\nSo the investment banks can provide th e services (such as trading of derivatives, fixed income instruments, foreign exchange and commodities) all over the world. Secondly, the revenue of the investment banks significantly more than profit of other types of banks. If you save your extra money in the retail banks, you can only get the interest from the rates. But if you spinal column your money to the investment banks you can get notable bring rounds although it has a high risk. For example the Goldman Sachs Group, Inc. is an American investment bank and securities.\r\nAnd it provides mergers and acquisitions advice, underwriting services, asset management, and prime brokerage to its clients, which include corporations, governments and individuals. Amazingly, the company in US profits reached a record $ 13. 39 billion in 2010, on average common shareholders’ equity rate of return is 22. 5%. At last, the investment banks also can provide some special services that the retail banks do not offer. For instance, it c an supply a particularly serving called â€Å"financial advice” what can make financial of a company more reasonability and acquire the future line of development.\r\nUBS AG is a alter global financial services company, with its main headquarter in Basel and Zurich, Switzerland and UBS is present in all major(ip) financial centers worldwide. With â€Å"Premier Advisory Services”, UBS offers you the fortune to schedule individual one-on-one consultations with CEFS experts who understand your equity-linked salary as an integrative part of your score wealth management, know about the different plan vehicles and can support you on issues such as â€Å"How can I best align my equity-linked compensation with my total wealth management” or â€Å"When should I exercise, which scheme is the best”.\r\n'