What is a “Bank”
The Bank is a financial institution licensed to accept deposits and make loans. Banks can also provide financial services such as wealth management, currency Exchange and a safe. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or Central Bank.
Breaking The Bank
Commercial banks, usually associated with managing Withdrawals and accept deposits from and providing short-term loans to individuals and small businesses. Consumers primarily use these banks for basic checking and savings accounts, certificates of Deposit (CDS) and mortgage loans. Examples of commercial banks include Houston JPMorgan chase & co. and Bank of America Corp.
Investment banks focus on providing corporate clients with services such as underwriting and promoting mergers and acquisitions (M&A) activity. Morgan Stanley and Goldman Sachs group Inc. examples of investment banks in the US.
Central banks are mainly responsible for the stability of the national currency, curbing inflation and monetary policy and control money supply. Some of the world’s major Central banks including the U.S. Federal reserve Bank, European Central Bank, the Bank of England, Bank of Japan, Swiss national Bank and people’s Bank of China.
While many banks have both a brick-and-mortar and online presence, some banks only on the Internet. Online-only banks often offer consumers higher interest rates and low fees. Convenience, interest rates and fees are factors in decisions consumers which Bank to do business. As an alternative to banks, consumers can use credit Union.
Regulation of activities of U.S. commercial banks
American banks came under scrutiny after the global financial crisis that occurred in 2007 and 2008. The regulatory environment for banks significantly tightened as a consequence. US banks are not regulated at the state or national level; depending on structure, they can be adjusted as. State banks are regulated by the Department of state or the banking Department of financial institutions. This Agency is responsible for regulating such matters as permitted practice, how much interest the Bank can charge, control and supervision of banks.
National banks are regulated by the office of the Comptroller of the currency (OSS). Regulations of the OCC primarily covers levels of Bank capital, asset quality and liquidity. Banks with Federal Deposit insurance Corporation (FDIC) insurance is additionally regulated by the FDIC. In response to the financial crisis, the Dodd-Frank wall Street reform and the law On consumer protection was adopted in 2010 with the aim of reducing risks in the financial system of the USA. In accordance with this act, large banks are assessed to have sufficient capital to continue to operate in difficult economic conditions. This annual assessment is called a stress test.