Banking may be recognized as distinguished into two separate branches - commercial banking and investment banking. By commercial banking is meant that phase of banking which has to do with short-term credits - credits based upon or intended to provide for the exchange of goods. By investment banking is meant banking which has to do with credits whose purpose is the development of production. Through it capital goods such as machinery are brought into the hands of those who will use them for productive purposes as well as goods which are merely destined for resale by the buyer. It thus also serves to supply business houses with the permanent capital they require, while commercial banking merely supplies those houses with this working capital which they need for temporary purposes and expect shortly to repay. Both investment banking and commercial banking thus bring about a redistribution of the capital in existence, though they do this in different ways and for different purposes.