Which statement is true regarding bank structures in the United States?

In the United States, the banking system is characterized by a clear distinction between investment banks and commercial banks. Investment banks primarily focus on underwriting, mergers and acquisitions, and facilitating transactions in capital markets, while commercial banks mainly deal with deposit accounts, loans, and other consumer banking activities.

This separation stems from historical regulations such as the Glass-Steagall Act, which was enacted in the 1930s to restrict affiliations between commercial and investment banking. Although some aspects of these regulations have been relaxed over time, the fundamental separation remains evident in the operational and service offerings of these institutions.

While some may point to developments in the banking industry that lead to closer relationships between the two types of banks, they fundamentally serve different purposes and have distinct regulatory requirements. Therefore, the correct statement reflects this fundamental distinction, affirming that investment banks and commercial banks are indeed separate entities in the U.S. banking landscape.