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Several quite various activities enter the scope of the bank activities: from savings and loans to the major monetary centres of commercial banks in the United States, but also from the smallest mutual company of building construction to the biggest companies holding the shares of Great Britain banks. The term “bank” can therefore be applied to a large range of financial institutions. Many European countries have important regional banks / cooperative banks on top of three to five international banks. In Japan, the bank that has the largest retail network is “Sumitomo Mitsui Banking Corporation”, but its main opponent concerning savings deposits is the Post Office.

business banking

I- The meaning of banking

Bank is a go-between. Indeed, its main activity is to act as an intermediary between the saver and the borrower. Other financial institutions, such as real estate brokers, are also intermediaries between share buyers and sellers, but it is the taking of deposits and the granting of loans that distinguish a bank, even if many other offer financial services.
Deposit products require the payment of the money by request or after a certain time. Banks have to control these deposits if they want to maximize their profits. Likewise, they control the assets created by loans.

II- Why are banks special

Contrary to other financial companies, they act as intermediaries between borrowers and loaners, and they offer a unique method of assets transformation. Moreover, a by-product of the intermediation is the contribution to the payment system. At last, banks play an important part in macro-economics, and they have a special relationship with the central bank.

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