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.
Famous quotes containing the word bank:
“on a May morwening upon Malverne hilles
Me befel a ferly, of fairye me thoughte;
I was wery ofwandred and wente me to reste
Under a brod bank by a bournes side;
And as I lay and lenede and lookede on the watres,
I slomerede into a sleeping, it swyede so merye.”
—William Langland (13301400)
“That strain again, it had a dying fall;
O, it came oer my ear like the sweet sound
That breathes upon a bank of violets,
Stealing and giving odor. Enough, no more,
Tis not so sweet now as it was before.”
—William Shakespeare (15641616)