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Question 14.3: What advantages do commercial banks with investment banking ...

What advantages do commercial banks with investment banking affiliates appear to have over competitors that do not offer investment banking services? Possible disadvantages?

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IB services complement traditional lending services allowing commercial banking firms to offer both conventional loans and security underwriting to customers who seek to raise new funds. In addition, there are economies in information gathering about clients. On the other had, IB services are highly sensitive to fluctuations in the economy and would increase the risk exposure of the commercial bank.

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