Introduction
Bank is one of the largest and most important institutions of aneconomic system. Banks provide two basicfunctions: they provide the security system and work as the payment mechanism. They are secured credit providers and money circulators. All the money in the country belongs to the bank and is generated by banks. The bank plays avital role in the growth of an economy. The central bank of any country regulates all commercial banks in the country. Central bank develops the rules and regulations for all the banks operating in the country. Monetary policies of any country are also developed by the central bank. Financial intermediation is also another primary function of banks. They either advance or invest the money we deposit in the banks.It sometimes gives credit to the companies and charges the interest that is the earning for the bank.Bank sometimes also plays the role of theunderwriterwhen public companies issue new shares. When issuing shares, it would be difficult for thepublic companies to directly go to thepublic for their sharesthat’s why they go to the bank which charges some amount for its services. The bank is aprofit-seeking organization andearns money by charging the interest to theborrower and also by providing the money back to those who deposit the money.
Peoples Bank Harvard Case Solution & Analysis
Banks work with the people todevelop their lives through different methods. History suggests that banks have helped many businesses to grow by giving them credit. Banks have also helped people to grow their investments overnight by offering them interests on their savings they made in the bank. This encourages the GDP to grow as the demand for money is created by banks in the economy and the banks are mainly responsible for the supply of currency in the market. The banks would further set the interest rates of the country in the monetary policy as suggested by the government.The interest rates would help the companyto boostpeople for saving or encourage them for borrowing. Banks are also used for the setting up of the monetary policy as the main bank setup by the country gives directions to the other banks and the government uses the main bank to control the supply of money and the interest rates of the banks in the country.
USA has around 6608 institutions in the banking industry. The number of institutions in the 1920s were 30,000 in the country. These banks included the community banks. On the other hand, the local banks are banks serving a fixed geographical area, they are considered to be small banks in the banking industry. The local banks have less than $10 billion dollars of assets. There are some banks who are neither small banks nor large banks and they have about $10 billion to $250 billion of assets. These banks are mostly the regional banks that serve a fixed territory or a segment chosen from the whole populace and they make products and bid services according to the preferences of the target market. The largest banks in the country are called the megabanks who are in the ratio of 8 out of 10 and they have assets of more than $250 billion............
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