Beginning Banking and Trading
Trading newbie interested in banking basics? Look no further! This article covers banking basics. Let’s begin!
What’s Bank?
Financial institutions like banks help people, companies, and governments. Banking offers deposits, loans, credit cards, wire transactions, and more. Banking gives the economy liquidity, credit, and stability.
Types of banks
distinct banks serve distinct purposes:
1. Commercial Banks: The biggest banks provide several services to consumers and corporations. They accept credit cards, loans, deposits, and more.2. Investment banks serve large enterprises and governments. M&A guidance and underwriting raise capital.3. Central banks manage interest rates, money supply, and financial stability. They oversee local banks and lend last.4. Retail banks provide mortgages, consumer loans, and personal banking.
Banks Work
Let’s examine banks’ main functions after learning about their types:
1. take Deposits: Banks take personal and company deposits. Can be checks, savings, or CDs. A bank deposit provides reliable lending money.2. Credit: Banks lend to consumers and companies. They earn from loan interest. Business, mortgage, and private loans are offered.3. Credit cards are issued by banks. Unpaid credit card balances earn bank interest.4. Payments: Banks allow several money transfer options. Company payments include checks, wire transfers, EFT, and others.
Banking Regulations
For financial stability and customer protection, banks are heavily regulated. Country-specific rules often include:
Minimum capital for losses and regulatory audits and reporting are required for banks.Prevent illegal activity using AML and KYC.Legislation protects consumers fairly and openly.
Conclusion
Consumers, corporations, and governments use banks in many ways. Banks are essential to the economy, receiving deposits, lending, and paying. Bank basics are crucial for traders and investment managers. This beginner’s way should teach banking!
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