Banks and Banking

Banks

A financial institution which acts like a financial broker is called bank. However the expression “bank” can be used in various situations. People can describe different institutions that are related to this word. A few of them are listed in the following. These examples illustrate the different types of banks:

• The central bank, which is the monetary authority in relation to monetary policy and money supply. This bank uses money under the authority of the government.
• The commercial bank, which deals with deposits and credits. This type of bank lends and invests money on the capital markets.
• The savings bank, which can be compared with a savings and loan association.

Banks play an important role in the field of the financial system. Therefore the banking industry is overseen by the government. It regulates different financial activities.

In a lot of countries, for example in Germany, the bank has a share in an industrial business. In other countries, for instance in the United States of America, it is forbidden to own financial enterprises.

Monte dei Paschi di Siena in Italy is the oldest bank that still works. This institution was established in 1472.

Banking

Banks make different payment services available for individuals, governments and businesses. Therefore they offer diverse channels for banking and other services. A few of them are listed below:

• Mobile Banking, which allows to effect transactions of banking,
• Online Banking, which is used for payments over the World Wide Web,
• Telephone Banking, which enables financial transactions via telephone without speaking to a consultant,
• Banking with Relationship Managers that visit their clients at home or business.