Essay on Banking and Money

Submitted By Chengchao199145C
Words: 381
Pages: 2

My brother is working at an investment bank. The bank name is ZHESHANG SECURITIES. Customers can make transaction in its system platform such as bonds, stocks and futures. When customers make a transaction in its system, the bank receives a service fee from the process of transaction. A part of fee is prize and salary for staff and the rest of fee is operation cost for development of facility. However, customers cannot store their money in investment bank. So, how do customers use their money to make transaction in system? Cash is not a good answer. It is too simple. Clients need to have a new cash account in investment bank. The account is used in capital market and it not allows clients to make the transaction about cash to cash. For example, you can make a transaction such as cash to stocks and stocks to cash. So, where is the money? The answer is commercial bank. I am not sure it is a true answer, but it is only an answer which I know it. Clients need to link cash account to the commercial bank account. Also, they make a contract with commercial bank. The contract indicates that clients can withdraw money from saving account to make transaction in capital market. This means clients can use their money between investment bank and commercial bank. Investment bank also provides advisor service. The service includes mergers and acquisition transactions. Many people don’t know investment bank can make a loan to customers. However, only a few clients will borrow money from