Banks and Banking

Banks are depository institutions that facilitate commerce by serving as lenders and borrowers. Banks receive, store, and lend money through various services such as checking and savings accounts, commercial, merchant, and investment banking functions.

The official functions of a bank include:

• Issuing money
• Lending money
• Processing payments, netting and settlement
• Accepting money on deposit
• Currency exchange
• Facilitate credit exchanges
• Maturity transformation

Banks operate in a relatively strict regulatory environment. To qualify for a license, most banks are required to meet a minimal capital ratio, an approved business model, and controls for operatives of a bank.

Online and telephone banking has revolutionized the banking establishment as more institutions turn to electronic services in place of tradition brick and mortar branch locations. ATMs have also served to increase the availability of banking services.

The advent of the financial supermarket, which has fallen out of favor in recent times, offered a vertically integration of services a bank can provide including:

• Retail banking
• Money management
• Merchant banking
• Investment banking
• Brokerage

Banks and Banking - Article By Better Trades