Whats the difference between an investment bank like Lehman and my bank?
A. Investment banks operate differently from commercial banks and thrift institutions. Their primary purpose is to facilitate the sale of stocks and bonds. These Wall Street firms operate as advisers and agents for companies that want to raise capital, often by issuing more stock or other securities. Commercial banks and thrift institutions take deposits for checking and savings accounts from consumers and businesses. These deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts. These banks lend this money to consumers and companies for autos, homes, business equipment, etc. Q. Should I be worried about the health of my bank? A. With 98 percent of nation’s 8,500 banks considered “well capitalized” – the highest designation possible – the possibility of your bank being taken over by the FDIC is extremely remote. And if it did happen, you would continue to have uninterrupted access to your FDIC insured deposits. Q. Ho
