Hello all
I'm a little confused with terms regarding banks. Like whether one is a credit or commercial bank. Correct me if I'm wrong, I tried searching but I couldnt find proper definitions for the mentioned.
For example, banks like JP Morgan Chase, Morgan Stanley and Merrill Lynch.
How can I classify these banks under?
and then there's something about investment of note.
Banks like Citibank, Wells Fargo, Bank of America, JP Morgan are considered commercial banks. Meaning that they serve the consumer aspect of banking and have retail functions (think UOB,OCBC,DBS,POSB).
In the past, Merrill Lynch, Goldman Sachs, Morgan Stanley were investment banks. Investment banks aren't really banks. They usually broker M&A (merger and acquisition) deals, sell and buy securities to make a profit.
However recent times have changed the face of the investment banking era with the collapse of Lehmen Brothers and Bear Stearns (and you could say Merrill Lynch although it was bought over by BOA). 2 weeks ago Goldman Sachs and Morgan Stanley were given bank-holding status ( which means they can take deposits, just like Citibank, Wells Fargo etc.)
I don't really know what a credit bank is. Maybe someone else might be able to help you out on that.
Originally posted by maxtor:Banks like Citibank, Wells Fargo, Bank of America, JP Morgan are considered commercial banks. Meaning that they serve the consumer aspect of banking and have retail functions (think UOB,OCBC,DBS,POSB).
In the past, Merrill Lynch, Goldman Sachs, Morgan Stanley were investment banks. Investment banks aren't really banks. They usually broker M&A (merger and acquisition) deals, sell and buy securities to make a profit.
However recent times have changed the face of the investment banking era with the collapse of Lehmen Brothers and Bear Stearns (and you could say Merrill Lynch although it was bought over by BOA). 2 weeks ago Goldman Sachs and Morgan Stanley were given bank-holding status ( which means they can take deposits, just like Citibank, Wells Fargo etc.)
I don't really know what a credit bank is. Maybe someone else might be able to help you out on that.
Thanks! that really helped alot
Originally posted by maxtor:Banks like Citibank, Wells Fargo, Bank of America, JP Morgan are considered commercial banks. Meaning that they serve the consumer aspect of banking and have retail functions (think UOB,OCBC,DBS,POSB).
In the past, Merrill Lynch, Goldman Sachs, Morgan Stanley were investment banks. Investment banks aren't really banks. They usually broker M&A (merger and acquisition) deals, sell and buy securities to make a profit.
However recent times have changed the face of the investment banking era with the collapse of Lehmen Brothers and Bear Stearns (and you could say Merrill Lynch although it was bought over by BOA). 2 weeks ago Goldman Sachs and Morgan Stanley were given bank-holding status ( which means they can take deposits, just like Citibank, Wells Fargo etc.)
I don't really know what a credit bank is. Maybe someone else might be able to help you out on that.
oh and by the way, do you get your sources purely from the news? or is there some particular website to get news like these. I'm kinda worried I'm not up to date with so much that's going on now..
Originally posted by coffeeortea:
oh and by the way, do you get your sources purely from the news? or is there some particular website to get news like these. I'm kinda worried I'm not up to date with so much that's going on now..
np. .. no la i just read a little. if you are very busy with work try to update yourself with news websites cos if you're really busy u can just read the headlines to keep you updated.
www.cnbc.com
www.finance.yahoo.com
www.bloomberg.com
all comes to mind here :)
There's no hard and fast rule universally to your answer. In the given climate, given the way things are, I'd say chuck all definitions out of the window - it's useless.
Case in point : UBS and Credit Suisse as entities are effectively commercial banks with both retail and investment banking operations. That said, you don't expect to find UBS or Credit Suisse branches in Singapore (or anywhere in the world outside Switzerland) that deals exclusively with retail banking (well, exclude PWM which is effectively a branch of investment banking these days).
In that regard, Credit Suisse and UBS' effective stature in Singapore is no different from Goldman Sachs and Morgan Stanley (traditionally pure investment banks and, even though these banks have since acquired bank holding status, there's nothing to suggest they'd go into retail banking on the scale of the Citi, HSBC or BofA - fact of the matter is these banks had to acquire the bank holding status to gain access to additional liquidity from the Fed to help them get by).
Morgan Stanley and Goldman Sachs are now subjected to the more stringent regulations of the Fed (as opposed to the SEC when they were pure investment banks) as part of the obligations they have to fulfil to gain the same level of access to the Fed as other commercial banks.
In short, the more relevant question is - in what context do you want to address your question?
If you're speaking as an investor and you don't belong to the high net worth bracket, you hardly need to worry about the difference between Goldman Sachs and UBS (even though these two institutions hold different status technically).