With trading assets of 10 of the largest investment banks in the UK summing to more than £5trn, the sheer scale of these operations means that liquidity in financial markets can be vulnerable to the failure of a single firm.That was the message of the Bank of England's (BoE) latest quarterly bulletin.In the report, the BoE said investment banks bring risks to the financial system. "Distress or failure of an investment bank can have a large systemic impact," it noted."In addition to size, the web of interconnections between investment banks and other financial institutions can act as a channel for the transmission of losses throughout the system, while the complexity of some of their activities also contributes significantly to risks in the global financial system."It said that many of these risks were crystallised during the recent global financial crisis when some of the largest global investment banks were taken over, bailed out using public funds or declared bankrupt after facing distress."They (investment banks) remain relevant to financial stability in the UK, with all of the largest global investment banks having operations in London," said the BOE.Since the crisis, there's been a number of regulatory initiatives implemented across the global in order to prevent another collapse of the system by building a safer, more resilient financial system to serve the real economy."The Bank of England has a key role to play in working with other regulatory bodies globally to fully implement these measures and ensure that investment banking activities are conducted in a way that is safe and sound," it added.