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:
“I have passed down the river before sunrise on a summer morning, between fields of lilies still shut in sleep; and when, at length, the flakes of sunlight from over the bank fell on the surface of the water, whole fields of white blossoms seemed to flash open before me, as I floated along, like the unfolding of a banner, so sensible is this flower to the influence of the sun’s rays.”
—Henry David Thoreau (1817–1862)
“What’s breaking into a bank compared with founding a bank?”
—Bertolt Brecht (1898–1956)
“A self is, by its very essence, a being with a past. One must look lengthwise backwards in the stream of time in order to see the self, or its shadow, now moving with the stream, now eddying in the currents from bank to bank of its channel, and now strenuously straining onwards in the pursuit of its chosen good.”
—Josiah Royce (1855–1916)