A great many factors may affect the policies which govern investment management of commercial banks. Investment policy would necessarily be a part of total operational policy and would need to contribute to the general objectives of the bank operation. For these reasons it is most difficult to separate investment policies from general operating policies for a banking institution.

The factors which affect general operating policies of banks, and therefore investment policies, could be quite numerous. There would be those factors outside the institution which would influence bank policies. For example, exogenous factors such as legislation, competition, economic environment and expectations for the future would all affect general operating policy. In addition, numerous factors within the firm could affect operating policies. Such endogenous factors as experience of management personnel in bank operation, custom and tradition within the firm, and ultimate aims and objectives of the managers would have a direct bearing on general policy and subsequently on investment policy.