Inst. Investors : Banks : Liquidity

Inst Investors, Banks ,LOS i (last paragraph)

Can someone explain this please:

" contrasting commercial banks and retail-oriented banks, commercial banks have a higher cost of funds and lower liquidity because of wholesale funding of loan commitments and other contingent commitments.
Conversely, retail banks have a lower cost of funds and better liquidity because their retail deposits are relatively low cost and tend to be more stable "

Why do commercial banks have a higher cost of funds? Does this mean that the corporations they provide loans to pay a higher rate ?
What does the CFAI text mean by “lower liquidity” - are they referring to the banks need for liquidity or do they mean that the securities commercial banks hold have lower liquidity?


Commercial loans given to business = high risk = high yield.

Thank you.

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