Bank

A bank is a financial institution that accepts deposits from the public and lends money to individuals, businesses, and governments. Banks provide payment services, such as checking accounts and electronic transfers, and they may offer wealth management or investment services. By acting as intermediaries between savers and borrowers, banks facilitate capital allocation and daily economics. Banks operate within regulatory frameworks designed to protect depositors and ensure financial stability.

Common types include commercial banks, which serve individuals and businesses; savings banks and credit unions, focused on deposits and loans; investment banks, which underwrite securities, advise on mergers, and assist with capital markets; and central banks, which set monetary policy, supervise the financial system, and lender of last resort.

In a typical system, banks keep reserves against deposits and make loans, creating new money through fractional reserve lending. Assets usually include loans and securities; liabilities consist of customer deposits and issued debt. Banks earn income from the interest margin on loans and fees for services such as payments, account maintenance, and advisory work.

Banks are subject to regulation by national authorities and, in many countries, participate in deposit insurance schemes. Capital requirements, liquidity standards, and regular supervision aim to limit credit, liquidity, and systemic risks. Financial stress or failures can have broad economic impacts.

The history of banking spans ancient moneylenders and medieval merchants to the modern regulated system. The development of central banks and modern payment networks helped stabilize monetary systems and foster economic growth.