Whats the difference between an investment bank like Lehman Brothers and my bank?
Traditional 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 $250,000 per depositor per insured bank. These banks lend this money to consumers and companies for autos, homes, business equipment, etc. Investment banks, unlike traditional banks and thrift institutions, 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.
