BANKING INDUSTRY

Banking Industry

Banking Industry

Bank

Bank or banking system set of institutions that enable the development of all transactions between individuals, companies and organizations that involve the use of money. Within the banking system can distinguish between public banks and private banks, which in turn may be commercial, industrial or mixed business. The private commercial banks are primarily concerned with providing loans to private individuals. Industrial or business invests its assets in industrial firms, by acquiring and directing. Mixed private banking combines both types of activities. In the nineteenth century were very common industrial banks, although they have been losing strength during the twentieth century in favor of mixed banking. Within the public banks should note, first, the issuing bank or central bank, which has a monopoly on printing money and usually belong to the State. Also include savings institutions and within them, in Spain, the savings banks (Fortune, 2011).

Features of the Banking System

The main role of a bank is to keep external funds on deposit, as well as to provide safe, transactions denominated liabilities. For the protection of these funds, banks charge a number of committees, which also apply to the various services that modern banks offer their customers a more competitive framework: credit cards, overdraft, bank, telephone among others. However, the savings bank may dispose of the depositor, paid to the latter by paying interest. We can distinguish various types of deposits. First, the deposits can be realized in the so-called current account: the client gives the bank a certain amount for it to the store and may dispose of them at any time. Time ago to acquire historical, these deposits were not paid, but the increasing competition among banks has made this trend has changed dramatically in all Western countries. Secondly, banks offer savings accounts, which are also deposits, i.e. you can dispose of them at any time (Boland, 2010). Deposits and withdrawals are made and are recorded through a savings account, which takes the form of financial documents. The availability of these deposits is less than the current account as it requires recourse to the bank to provide funds, while checking accounts allow the provision of funds by using checks and credit cards. Thirdly we must mention the so-called fixed-term accounts, where there is no free disposal of funds, but they recover to the expiration date, although, in practice, you can dispose of these funds prior to default, but with a penalty (payment of the fund is lower than in the case of waiting for the expiration date). Fourth, there are certificates of deposit denominated financial instruments very similar to deposits or fixed-term accounts, the main difference comes from how they are documented. The certificates are made through a written document interchangeably, i.e., whose property can be transferred. Finally, within the different types of deposits, savings deposits are connected bearing accounts related to banking asset (in the case of a housing account: how much is to be used for a particular purpose, as is the case of house purchase in our example).

Banks, with the funds deposited, provide loans and credits to other customers, gaining in exchange ...