9. Finance and banking

Finance is money as recourses for business and other activates and the management of money for business and other activates. Banking is business of running finances.

Speaking about banks and money we can’t help mentioning the city of Amsterdam. By 1609 there were a lot of coined money there. It was the problem of quality of coins that the merchants had to solve. In 1609 they created a bank owned by the city. A merchant brought his good and wretched coins to the bank, the bank weighed. The weight of the pure metal was then credited to his account.

This deposit was a very reliable form of money. A merchant could transfer it to the account of another merchant. The recipient knew that he was getting honest weight, nothing funny.

In 1694 the Bank of England was formed. It regulated the creation of money. Also it maintained reasonable reserves of cash against their note issues. So the Bank of England had the regulatory function, land money to other bank.

The banking sector in the UK is made up of a variety of institutions supervised by the countries central bank, The Bank of England. This bank looks after the governments finance and monetary policy and acts as banker to other banks. However, for the general public and many businesses banking services are provided by commercial banks, or clearing banks, which have branches throughout the country. These banks offer a wide range of services, which include accepting, deposits, making loans and managing customer’s accounts. Merchant banks on the other hand do not deal with the public but specialize in services for companies or corporate customers. They are particularly active in arranging mergers and acquisitions and in advising on aspects of corporate finance.

In US there are types of bank, such as saving bank - services of customer, they grant loan to customer. And commercial bank – serves business.

Any bank grants the following types of banking services:

1. Accepts deposits

2. Makes loans

3. Manage customer account

4. Arranging managers and acquisitions

5. Advising on aspect corporate finance

6. Offer chequebook, credit card or debit card

7. Provide ATM services

8. Provide traveler’s cheques

9. Offer mortgages, investment product, saving

There are some traditional banking services and some new ways of banking: offer and manage current account and joint account.

Also need to say about investment. Investment is baying property shares, securities, atc to sell again to make a profit or to receive money in the form of interest. Investments are differed on personal and cooperate. The personal is unit trust or mutual funds, contribution into a private pension. Cooperate is investment saving account at a building society.

Companies and individuals often borrow money, and it is important to find a favourable interest rate. Rates are variable and can rise or fall depending on the market. Many investors (people who use their money to earn more money) choose foreign or offshore bank accounts because they are tax-free. Anyone can buy shares in a public company and become a shareholder. All public companies are obliged by law to publish their financial results at the end of the tax year. They do this in their annual reports to shareholders. Annual reports include profit and loss accounts which show turnover, or the total sum of money which is coming into the company. It is (profit and loss account) basically a statement of the cash available to a company, the money to continue its operations. And it's information to managers in helping them make their decisions in running the company and very importantly, it's information to the shareholders how well their investment in that company is working for them.