How does a secondary bank primarily operate?

A secondary bank primarily operates by focusing on capital market activities such as arranging new securities and providing advice related to those markets. This distinguishes it from primary banks, which typically accept deposits from the public and offer traditional retail banking services.

Secondary banks often engage in investment banking activities, which include underwriting new issues of stocks and bonds, advising corporations on mergers and acquisitions, and facilitating other complex financial transactions. Their expertise lies in capital raising, market analysis, and providing strategic financial advice to businesses, making them instrumental in the corporate finance sector.

In contrast, options like accepting deposits or issuing loans pertain to the functions of traditional banking institutions, which do not primarily characterize the operations of a secondary bank. Money transmission services are also typically more associated with payment institutions rather than the specific role that a secondary bank plays in capital markets.