Finance, Forex and Investments

What money commercial banks use to invest?

How can commercial banks invest in equity? I mean what money do they use to buy commodities or, in particular, government bonds? Is it excess reserve money at the Fed or what? Could you explain the whole idea in detail?

Public Comments

1. After the bail-out the regulation has been changed. Commercial banks cannot use people money to invest in stocks and corporate bonds. They can buy government bonds and FED's securities, though. And they can keep them as reserve required by the law. The investment banks only can invest in stocks.