Definition
The term private bank refers to a financial institution that is not publicly traded. Cooperative banks and credit unions are examples of private banks.
Explanation
Credit unions and cooperative banks are oftentimes created by affinity groups, which share a common set of interests or values. These banks are frequently owned by members and not incorporated, which means they are not owned by shareholders or publicly traded on an exchange.
Outside of the United States, the term private bank is sometimes used to refer to banks that are not owned by a government agency. The term may also be used when referring to private banking, which is a financial advice service for high net worth individuals.
