16. Banking

Banking is the business providing financial services for individuals and companies. Some of basic services are checking (current) accounts, saving and deposit accounts that can be used to save money for future use. Other services include loans, credit cards and basic cash management services such as foreign currency exchange.

Banking institutions have many types, such as commercial banks, saving and loan associations and saving banks. The major differences lie in how they own and manage their assets and liabilities. Bank assets are typically cash, loans, securities and property in which bank has invested. Liabilities are mainly the deposits received from the bank customers, which are still owned by, and can be withdraw by, the depositors.

There are other financial institutions providing banking services include: finance, insurance, investment companies, pension funds and so on.

Types of banks

Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.

1) retail banks:

- Private banks: banks that manage the assets of high net worth individuals.

- Commercial bank: is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits..

2) Investment banks

-An investment bank is a financial institution that assists corporations and governments in raising capital by underwriting and acting as the agent in the issuance of securities. An investment bank also assists companies involved in mergers and acquisitions, derivatives, etc. Further it provides ancillary services such as market making and the trading of derivatives, fixed income instruments, foreign exchange, commodity, and equity securities.

Unlike commercial banks and retail banks, investment banks do not take deposits.

-In banking, a merchant bank is a financial institution primarily engaged in offering financial services and advice to corporations and to wealthy individuals. The term can also be used to describe the private equity activities of banking.[1] The chief distinction between an investment bank and a merchant bank is that a merchant bank invests its own capital in a client company whereas an investment bank purely distributes (and trades) the securities of that company in its capital raising role. Both merchant banks and investment banks provide fee based corporate advisory services, including in relation to mergers and acquisitions.

3)Both combined

-Universal banks, more commonly known as financial services companies, engage in several of these activities.These big banks are very diversified groups that, among other services, also distribute insurance.