Making Profit from Money. Commercial and retails banks raise funds by lending money at a higher rate of interest than they borrow it. This money is borrowed from other banks or from customers who deposit money with. They also charge customers fees for services to do with managing their accounts, and earn money from bank how does a financial services company make money levied on overdrafts servicces exceed agreed limits. Investment banks earn fees from providing advice to large organisations coming to the City to issue stocks and shares, and for underwriting these issues, as well as trading securities on the financial markets. Eervices many years leading up tointerest rates were very low in Western countries and money was cheap. Banks needed to lend as much as they could if they were going to make the level of profits that they were used to. So some banks, especially in the USA, lent to poorer people, who had less chance of paying back their loans miney the banks’ traditional customers. To manage the risk, banks invented new and complex ways to lend. They also invented new ways to package up these debts. This involved turning loans fiinancial could not be traded, into a type of security that could be traded. Eventually no one really knew who was lending what to .
