Back to Basics: What Is a Bank? - International Monetary Fund
The banking system is a complex network of institutions designed to manage the flow of money, provide credit, and ensure financial stability within an economy. It acts as a bridge between those who have extra funds (depositors) and those who need them (borrowers). 🏛️ Core Components of the Banking System
Focus on individual consumers (checking/savings accounts, personal loans). banking system
The system is generally structured in a "two-tier" hierarchy: 1. Central Banks
These are the front-facing institutions that interact with the public and businesses. Back to Basics: What Is a Bank
Provides emergency loans to commercial banks. 2. Commercial & Retail Banks
Responsible for printing and distributing national currency. 🏛️ Core Components of the Banking System Focus
The apex body that regulates the entire system (e.g., the Federal Reserve in the US or the RBI in India). Controls the money supply and inflation.