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Explain why investment banks are not financial intermediaries

Explain why investment banks are not financial intermediaries

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Investment banks are not financial intermediaries because they do not offer with deposit facility and they also do not act as a link between borrowers and depositors because these are the functions of commercial banks.

Investment banks are generally associated with various kinds of investment related activities which could be done in order to maximize the return of its stakeholders and it is into other operations like underwriting and management of portfolios etc.

It is also not subjected to the banking rules and regulations so it is used as a investment vehicle rather than a commercial Bank, so it does not act as a link between the savers in the economy and the borrowers in the economy so it can be said that investment bankers are not a financial intermediary.

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