Business Banking

What is 'Business Banking'

Business banking is a company's financial dealings with an institution that provides business loans, credit, savings and checking accounts specifically for companies and not for individuals. Business banking is also known as commercial banking and occurs when a bank, or division of a bank, only deals with businesses. A bank that deals mainly with individuals is generally called a retail bank, while a bank that deals with capital markets is known as an investment bank.

BREAKING DOWN 'Business Banking'

In the past, investment banks and retail/commercial banks had to be separate entities, under the Glass Steagall Act, but now a single bank can deal with business banking, retail banking and investment banking. The Glass-Steagall Act is also known as the Banking Act of 1933, and was introduced to manage speculation. Parts of the act were repealed in 1999, making it no longer illegal for an investment bank to also engage in business/commercial and retail banking.

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RELATED FAQS
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    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ... Read Answer >>
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  3. What are the major categories of financial institutions and what are their primary ...

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  4. What is the average profit margin for a company in the banking sector?

    Learn what the average profit margin is for companies in the banking sector, along with other evaluation metrics often used ... Read Answer >>
  5. What is the difference between an investment and a retail bank?

    Learn the primary differences between retail banks and investment banks by examining the business activities, type of clients ... Read Answer >>
  6. What agencies were created by the Glass-Steagall Act?

    Learn about the Glass-Steagall Act of 1933 that significantly reformed the banking industry, and specifically, what government ... Read Answer >>
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