A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking.
After the Great Depression, the U.S. Congress required banks to only engage in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S. law, some use the term "commercial bank" to refer to a bank or a division of a bank primarily dealing with deposits and loans from corporations or large businesses. In some other jurisdictions, the strict separation of investment and commercial banking never applied. Commercial banking may also be seen as distinct from retail banking, which involves the provision of financial services direct to consumers. Some banks do both.
Related Fool Articles
- [link link title]