Commercial Banking

Commercial banking is often referred to business banking. Commercial banks are financial institutions that can also act as an intermediary. The Federal Reserve Board and the Federal Deposit Insurance Corporation or FDIC regulate the banks which are a part of the commercial banking industry.

Services provided by commercial banks include savings, transactions and money market accounts as well as other services.

Commercial banks have a variety of deposit accounts. These accounts normally include savings, checking and time deposit.

Though commercial banks provide a variety of services; the primary activities of a commercial bank are receiving deposits and issuing commercial and industrial loans. There are several types of loans which may commonly be offered by commercial banks. Secured loans which require the borrower to provide collateral and mortgage loans are often common in commercial banking. Also, many commercial banks may use the deposits from customers to grant commercial and industrial loans at a higher interest rate.

Commercial banks may also provide services to consumers as well as businesses as business and individual clients may require many of the same services though on a different scale. Because of this commercial banks have a variety of drivers which affect the industry.

The commercial banking industry has experienced a great deal of ups and downs in the past five years as the industry and the economy has changed. Factors such as employment rates, interest rates and overall consumer confidence have played a major role in the success or lack of, in the commercial banking industry.