A role of banks in modern economy

In all countries banking within several years tests radical changes. The economic crisis on the one hand, technological progress with another strengthens impact of the competition which prevails over the bank world. That will adapt to evolution of conditions of the environment surrounding them banks should resort to unprecedented modernization. And, it is characteristic not only for modern banks, but also for all history of banking.

The long time up to the 19th century, development of the monetary capital went generally in parallel with development of the production and trading capital. The bank credit acted as one of few forms of the monetary capital and practically its unique form with reference to requirements of production and trading sectors of economy. At the same time bank credit promoting concentration and centralization of the capital, was a powerful factor of economic development. A result of this development were begun with the second half of last century processes of change of economic structure of capitalist society. First of all it is necessary to refer development of joint-stock form of ownership and a tendency to monopolization to them, i.e. such on extreme the external inconsistent phenomena, as nationalization and centralization of the capital based substantially on it. These interconnected processes by which major condition the intensification of movement of the monetary capitals served, changed the provision of a monetary form, having nominated her to leading positions among all forms of the capital. Under the influence of occurring changes the provision of the banking sector in economic system of society considerably became stronger. Besides, has development new, alternative bank a way of movement of the monetary capitals. It is a question of release in the circulation of share and debt securities. Creation of stock market marked an important stage in development of economy of the capitalist countries. With the advent of new type of the market banks were put forward in number of his main participants.

Participation in operations in stock market considerably increased profitability of bank activity. At the same time the additional risks connected with a new kind of activity were an objective factor of decrease in stability of banks. As a result of lack of additional regulatory measures for an provision of liquidity and reserves economic a company adverse the environment which has developed in the financial market (in the USA in 1929) led to a deep financial and all-economic crisis. It gave the grounds originally American, and in the subsequent and to legislators of some other the countries for introduction of compulsory specialization in financial business and allocation of investment activity independently adjustable branch, and also a legislative ban on this activity for banks. Such specialization, creating some additional possibilities from the point of view of control and maintenance of liquidity of banks and investment companies, constrains development of the competition and as a whole the capital markets that economy development objectively brakes. Therefore in the USA since 80th years of the 20th eyelid expediency of preservation early the entered restrictions everything more is called in question these doubts are supported with examples of the countries which banking sector safely develops in the absence of any specialization in the field of investment activity and at the leading role of universal banks. Thus banking in the development underwent considerable changes that is caused by temporary distinctions and eras.