1. Investment firms

What are investment firms?

Investment firms play an important role in facilitating savings and investment flows across the EU, forming a vital cog in a well-functioning Capital Markets Union. Alongside credit institutions (banks), they provide a range of services which give investors access to securities and derivatives markets. Such services include investment advice, portfolio management, executing orders for clients, trading in financial instruments and helping companies raise funds on capital markets.

Unlike credit institutions, investment firms do not accept deposits, nor do they provide loans on a significant scale. This means that they are a lot less exposed to the risk of depositors withdrawing their money at short notice and of borrowers failing to pay them back. They do however compete with credit institutions in providing investment services, which credit institutions can offer to their customers under their banking licence.

According to the European Bank

…