Bank
Overview
A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized 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.
History of Banking
The history of banking began with the first prototype banks which were the merchants of the world, who gave grain loans to farmers and traders who carried goods between cities. This was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during the Roman Empire, lenders based in temples gave loans, while accepting deposits and performing the change of money. Archaeology from this period in ancient China and India also shows evidence of money lending.
Modern Banking
Modern banking practices, including fractional reserve banking and the issue of banknotes, emerged in the 17th and 18th centuries. In the 20th century, developments in telecommunications and computing caused major changes to banks' operations and let banks dramatically increase in size and geographic spread. The late 20th century saw a rise in interest in ethical banking and an increase in digital banking.
Types of Banks
Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high-net-worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises, but some are owned by government, or are non-profit organizations.
Banking Services
Banks offer many different channels to access their banking and other services: A branch, banking centre, office, or financial centre is a retail location where a bank, credit union, or other financial institution (including a brokerage firm) offers a wide array of face-to-face and automated services to its customers. ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. Some ATMs provide additional services. Remote banking encompasses telephone banking, online banking, and mobile banking.
Banking Laws and Regulations
Banks are regulated by the laws and regulations of their home country and must comply with many standards and regulations, such as the USA's Bank Secrecy Act and other anti-money laundering (AML) laws. There is also a host of international banking regulations that banks must follow, including the Basel Accords.