Who do investment banks borrow from?

Institutional Investors. Institutions like development corporations, mutual funds, banks, pension funds, hedge funds pool money to purchase securities. read more

The case has led to calls by some US politicians for new rules that will ban traders at investment banks from exploiting their clients' gullibility. Splitting up. Strictly speaking, what investment banks do not do is "traditional" banking - taking deposits from ordinary folk and making loans to local companies. read more

Deposits: During the financial crisis, independent investment banks either merged with or converted to Bank Holding Companies (BHCs) in order to access various emergency liquidity facilities. Goldman Sachs still retains this designation. read more

Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before the close of business. To put itself back over the minimum reserve threshold, a bank borrows money from the government's central bank utilizing what is known as the discount window. read more