Investment Security

Investment Security - Investment Security is marketable securities held by a bank in its portfolio of balance sheet assets. Investment securities, along with bank loans are the principal source of bank earnings, and serve two key functions. It is the source of bank liquidity or funding to meet loan demand or customers needs for cash and as an additional source of earnings from the capital gains realized with portfolio securities sold. Eligible securities that a bank legally can hold as investments include U.S. Treasury securities, federal agency obligations, debt securities of state and local governments, stock in Federal Reserve banks and pledging requirements.