A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank is the connection between customers that have capital deficits and customers with capital surpluses.
Due to their influence within a financial system and an economy, banks are generally highly regulated in most countries. Most banks operate under a system known as fractional reserve banking where they hold only a small reserve of the funds deposited and lend out the rest for profit. They are generally subject to minimum capital requirements which are based on an international set of capital standards, known as the Basel Accords.
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472. It is followed by Berenberg Bank of Hamburg (1590) and Sveriges Riksbank of Sweden (1668).
Banking in its modern sense evolved in rich cities of Renaissance Italy, such as Florence, Venice and Genoa. In the history of banking, a number of banking dynasties—among them notably Medici, Fugger, Welser, Berenberg, Baring and Rothschild—have played a central role over many centuries.
Read more about Bank: History, Definition, Risk and Capital, Regulation, Types of Banks, Challenges Within The Banking Industry, Accounting For Bank Accounts, Globalization in The Banking Industry
Famous quotes containing the word bank:
“Life is a long Dardenelles, My Dear Madam, the shores whereof are bright with flowers, which we want to pluck, but the bank is too high; & so we float on & on, hoping to come to a landing-place at last—but swoop! we launch into the great sea! Yet the geographers say, even then we must not despair, because across the great sea, however desolate & vacant it may look, lie all Persia & the delicious lands roundabout Damascus.”
—Herman Melville (1819–1891)
“I know a bank where the wild thyme blows,
Where oxlips and the nodding violet grows,
Quite overcanopied with luscious woodbine,
With sweet musk-roses, and with eglantine:
There sleeps Titania sometime of the night,
Lulled in these flowers with dances and delight.”
—William Shakespeare (1564–1616)
“We bank over Boston. I am safe. I put on my hat.
I am almost someone going home. The story has ended.”
—Anne Sexton (1928–1974)