A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Whereas banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional-reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords. (Full article...)
Fractional-reserve banking is the system of banking in all countries worldwide, under which banks that take deposits from the public keep only part of their deposit liabilities in liquid assets as a reserve, typically lending the remainder to borrowers. Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank. Fractional-reserve banking differs from the hypothetical alternative model, full-reserve banking, in which banks would keep all depositor funds on hand as reserves.
The country's central bank may determine a minimum amount that banks must hold in reserves, called the "reserve requirement" or "reserve ratio". Most commercial banks hold more than this minimum amount as excess reserves. Some countries, e.g. the core Anglosphere countries of the United States, the United Kingdom, Canada, Australia, and New Zealand, and the three Scandinavian countries, do not impose reserve requirements at all. (Full article...)
According to the United States Electronic Fund Transfer Act of 1978 it is "a funds transfer initiated through an electronic terminal, telephone, computer (including on-line banking) or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account". (Full article...)
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A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, mobile app, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no branch network. It may offer access to an independent banking agent network and may also provide access via ATMs (often through interbank network alliances), and bank by mail. Direct banks eliminate the costs of maintaining a branch network while offering convenience to customers who prefer digital technology. Direct banks provide some but not all of the services offered by physical banks.
Direct bank transactions are conducted entirely online. Direct banks are not the same as "online banking". Online banking is an Internet-based option offered by regular banks. (Full article...)
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An ATM card is a dedicated payment card card issued by a financial institution (i.e. a bank) which enables a customer to access their financial accounts via its and others' automated teller machines (ATMs) and, in some countries, to make approved point of purchase retail transactions. ATM cards are not credit cards or debit cards, however most credit and debit cards can also act as ATM cards and that is the most common way that banks issue cards since the 2010s.
ATM cards are payment card size and style plastic cards with a magnetic stripe and/or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). ATM cards are known by a variety of names such as bank card, MAC (money access card), client card, key card or cash card, among others. Other payment cards, such as debit cards and credit cards can also function as ATM cards. Charge and proprietary cards cannot be used as ATM cards. The use of a credit card to withdraw cash at an ATM is treated differently to a point of sale transaction, usually attracting interest charges from the date of the cash withdrawal. (Full article...)
ATMs are known by a variety of names, including automatic teller machines (ATM) in the United States (sometimes redundantly as "ATM machine"). In Canada, the term automated banking machine (ABM) is also used, although ATM is also very commonly used in Canada, with many Canadian organizations using ATM over ABM. In British English, the terms cashpoint, cash machine and hole in the wall are most widely used.[better source needed] Other terms include any time money, cashline, tyme machine, cash dispenser, cash corner, bankomat, or bancomat. ATMs that are not operated by a financial institution are known as "white-label" ATMs. (Full article...)
Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business's calendar year. (Full article...)
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An advising bank (also known as a notifying bank) advises a beneficiary (exporter) that a letter of credit (L/C) opened by an issuing bank for an applicant (importer) is available. An advising bank's responsibility is to authenticate the letter of credit issued by the issuer to avoid fraud. The advising bank is not necessarily responsible for the payment of the credit which it advises the beneficiary of. The advising bank is usually located in the beneficiary's country. It can be (1) a branch office of the issuing bank or a correspondent bank, or (2) a bank appointed by the beneficiary. An important point is the beneficiary has to be comfortable with the advising bank.
In case (1), the issuing bank most often sends the L/C through its branch office or correspondent bank to avoid fraud. The branch office or the correspondent bank maintains specimen signature(s) on file where it may counter-check the signature(s) on the L/C, and it has a coding system (a secret test key) to distinguish a genuine L/C from a fraudulent one (authentication). (Full article...)
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In the English language, banq and banc are coined words pronounced identically to the word "bank". Both terms have been adopted by financial services companies and others to satisfy legal restrictions on the usage of the word bank. The compoundbancorp (banc/bank + corp[oration]) is often used in the names of bank holding companies. For example, a hypothetical chartered bank named Bank of Manhattan might form a holding company named "Manhattan Bancorp", and a sister insurance business named "Banc of Manhattan Insurance". One well-known past example was Bank of America's investment banking entity, named Banc of America Securities (now part of Bank of America Merrill Lynch).
This practice originates from legal necessity: in the United States, the commerce departments of state governments generally prohibit or restrict the use of certain words in the names of corporations unless those corporations are legitimate chartered banks. For example, words prohibited by the state of Louisiana include bank, banker, banking, savings, safe deposit, trust, trustee, and credit union. (Full article...)
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A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may fail in the near future. In other words, it is when, in a fractional-reserve banking system (where banks normally only keep a small proportion of their assets as cash), numerous customers withdraw cash from deposit accounts with a financial institution at the same time because they believe that the financial institution is, or might become, insolvent. When they transfer funds to another institution, it may be characterized as a capital flight. As a bank run progresses, it may become a self-fulfilling prophecy: as more people withdraw cash, the likelihood of default increases, triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy. To combat a bank run, a bank may acquire more cash from other banks or from the central bank, or limit the amount of cash customers may withdraw, either by imposing a hard limit or by scheduling quick deliveries of cash, encouraging high-return term deposits to reduce on-demand withdrawals or suspending withdrawals altogether.
A banking panic or bank panic is a financial crisis that occurs when many banks suffer runs at the same time, as people suddenly try to convert their threatened deposits into cash or try to get out of their domestic banking system altogether. A systemic banking crisis is one where all or almost all of the banking capital in a country is wiped out. The resulting chain of bankruptcies can cause a long economic recession as domestic businesses and consumers are starved of capital as the domestic banking system shuts down. According to former U.S. Federal Reserve chairman Ben Bernanke, the Great Depression was caused by the failure of the Federal Reserve System to prevent deflation, and much of the economic damage was caused directly by bank runs. The cost of cleaning up a systemic banking crisis can be huge, with fiscal costs averaging 13% of GDP and economic output losses averaging 20% of GDP for important crises from 1970 to 2007. (Full article...)
Founded as a limited company on 1 January 1984, ICBC is a state-ownedcommercial bank. With capital provided by the Ministry of Finance of China, the bank's Tier 1 capital in 2013 was the largest of one thousand global banks, being the first bank headquartered in China to achieve this distinction in modern history. Subsequently, ranked the largest bank in the world 2017 and 2018, by total assets, (31 December 2020, US$4.324 trillion), ICBC was positioned at 1st in The Banker's Top 1000 World Banks ranking, every year from 2012, and first (2019) on the Forbes Global 2000 list of the world's biggest public companies. ICBC is also the 3rd largest bank in the world by market capitalization at $211 billion (31 December 2022). (Full article...)
PSBC was set up with an initial capital of RMB20 billion in 2007 from the State Post Bureau. Today it has RMB1.5 trillion in deposits and the second largest number of branches, after the Agricultural Bank of China. (Full article...)
Credit Suisse was founded in 1856 to fund the development of Switzerland's rail system. It issued loans that helped create Switzerland's electrical grid and the European rail system. In the 1900s, it began shifting to retail banking in response to the elevation of the middle class and competition from fellow Swiss banks UBS and Julius Bär. Credit Suisse partnered with First Boston in 1978 before buying a controlling share of the bank in 1988. From 1990 to 2000, the company purchased institutions such as Winterthur Group, Swiss Volksbank, Swiss American Securities Inc. (SASI), and Bank Leu. (Full article...)
Danske Bank A/S (pronounced[ˈtænˀskəˈpɑŋˀk], lit.'Danish Bank') is a Danish multinational banking and financial services corporation. Headquartered in Copenhagen, it is the largest bank in Denmark and a major retail bank in the northern European region with over 5 million retail customers. Danske Bank was number 454 on the Fortune Global 500 list for 2011. The largest shareholder with 21% of the share capital is A.P. Moller Holding, the investment holding company of the Maersk family.
It was founded 5 October 1871 as Den Danske Landmandsbank, Hypothek- og Vexelbank i Kjøbenhavn ("The Danish Farmers' Bank, Mortgage and Exchange Bank of Copenhagen"), and was commonly known as Landmandsbanken ("the Farmers' Bank"). In 1976, the bank changed name to Den Danske Bank ("The Danish Bank"), and the current name was adopted in 2000. (Full article...)
Many subsidiaries, such as Abbey National, have been rebranded under the Santander name. The company is a component of the Euro Stoxx 50stock market index. In June 2023, Santander was ranked as 49th in the Forbes Global 2000 list of the world's biggest public companies. In 2023, the company was ranked 49th in the Forbes Global 2000. Santander is Spain's largest bank. (Full article...)
The Bank of Estonia (Estonian: Eesti Pank) is the Estonian member of the Eurosystem and has been the monetary authority for Estonia from 1919 to 2010, albeit with a long suspension between 1940 and 1991, issuing the Estonian kroon. The bank doesn't translate its name to English but uses its Estonian name Eesti Pank in all English communications. (Full article...)
It is a major financial institution that started in 1875 as a postal savings system, and that still today continues to operate primarily out of post office branches. It manages over ¥205 trillion of assets and offers services in almost 24,000 branches across Japan. At times in its history, it was the largest financial institution in the world. Since its conception, it has played a significant role in both making economic services to people in Japan and making investments towards the economic and industrial development of the country. (Full article...)
Established in 1908, the Bank of Communications claims a long history in China and is one of the banks to have issued banknotes in modern Chinese history. It was listed on the Stock Exchange of Hong Kong in June 2005 and the Shanghai Stock Exchange in May 2007. The Bank was ranked No. 151 among the Fortune Global 500 in terms of operating income and No. 11 among the global top 1,000 banks in terms of Tier 1 capital rated by the London-based magazine The Banker. In 2023, the company was ranked 53rd in the Forbes Global 2000. (Full article...)
Image 20Statesman Jan van den Brink was instrumental in the merger of Amsterdamsche Bank and Rotterdamsche Bank in 1964, and remained on the bank's board until 1978 (from AMRO Bank)