notes of financial management
Banks and Banking lecture notes
A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses.
Due to their importance in the financial system and influence on national economies, banks are highly regulated in most countries. Most nations have institutionalised a system known as fractional reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world. In the history of banking, a number of banking dynasties—notably the Medicis, the Fuggers, the Welsers, the Berenbergs, and the Rothschilds—have played a central role over many centuries. The oldest existing retail bank is Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.
Contents
1 History
1.1 Origin of the word
2 Definition
3 Banking
3.1 Standard activities
3.2 Range of activities
3.3 Channels
3.4 Business model
3.5 Products
3.5.1 Retail banking
3.5.2 Business (or commercial/investment) banking
4 Capital and risk
5 Banks in the economy
5.1 Economic functions
5.2 Bank crisis
5.3 Size of global banking industry
6 Regulation
7 Types of banks
7.1 Types of retail banks
7.2 Types of investment banks
7.3 Both combined
7.4 Other types of banks
8 Challenges within the banking industry
8.1 United States
8.2 Competition for loanable funds
9 Accounting for bank accounts
9.1 Brokered deposits
A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses.
Due to their importance in the financial system and influence on national economies, banks are highly regulated in most countries. Most nations have institutionalised a system known as fractional reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world. In the history of banking, a number of banking dynasties—notably the Medicis, the Fuggers, the Welsers, the Berenbergs, and the Rothschilds—have played a central role over many centuries. The oldest existing retail bank is Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.
Contents
1 History
1.1 Origin of the word
2 Definition
3 Banking
3.1 Standard activities
3.2 Range of activities
3.3 Channels
3.4 Business model
3.5 Products
3.5.1 Retail banking
3.5.2 Business (or commercial/investment) banking
4 Capital and risk
5 Banks in the economy
5.1 Economic functions
5.2 Bank crisis
5.3 Size of global banking industry
6 Regulation
7 Types of banks
7.1 Types of retail banks
7.2 Types of investment banks
7.3 Both combined
7.4 Other types of banks
8 Challenges within the banking industry
8.1 United States
8.2 Competition for loanable funds
9 Accounting for bank accounts
9.1 Brokered deposits
References: The sealing of the Bank of England Charter (1694). The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472.[9] It is followed by Berenberg Bank of Hamburg (1590)[10] and Sveriges Riksbank of Sweden (1668).