Banks free essay sample

# 1052 ; # 1080 ; # 1085 ; # 1080 ; # 1089 ; # 1090 ; # 1077 ; # 1088 ; # 1089 ; # 1090 ; # 1074 ; # 1086 ; # 1086 ; # 1073 ; # 1088 ; # 1072 ; # 1079 ; # 1086 ; # 1074 ; # 1072 ; # 1085 ; # 1080 ; # 1103 ; # 1056 ; # 1086 ; # 1089 ; # 1089 ; # 1080 ; # 1081 ; # 1089 ; # 1082 ; # 1086 ; # 1081 ; # 1060 ; # 1077 ; # 1076 ; # 1077 ; # 1088 ; # 1072 ; # 1094 ; # 1080 ; # 1080 ; # 1052 ; # 1086 ; # 1089 ; # 1082 ; # 1086 ; # 1074 ; # 1089 ; # 1082 ; # 1080 ; # 1081 ; # 1043 ; # 1086 ; # 1089 ; # 1091 ; # 1076 ; # 1072 ; # 1088 ; # 1089 ; # 1090 ; # 1074 ; # 1077 ; # 1085 ; # 1085 ; # 1099 ; # 1081 ; # 1059 ; # 1085 ; # 1080 ; # 1074 ; # 1077 ; # 1088 ; # 1089 ; # 1080 ; # 1090 ; # 1077 ; # 1090 ; # 1055 ; # 1077 ; # 1095 ; # 1072 ; # 1090 ; # 1080 ; # 1080 ; # 1084 ; . # 1048 ; # 1074 ; # 1072 ; # 1085 ; # 1072 ; # 1060 ; # 1105 ; # 1076 ; # 1086 ; # 1088 ; # 1086 ; # 1075 ; # 1086 ; # 1060 ; # 1072 ; # 1082 ; # 1091 ; # 1083 ; # 1100 ; # 1090 ; # 1077 ; # 1090 ; # 1101 ; # 1082 ; # 1086 ; # 1085 ; # 1086 ; # 1084 ; # 1080 ; # 1082 ; # 1080 ; # 1080 ; # 1084 ; # 1077 ; # 1085 ; # 1077 ; # 1076 ; # 1078 ; # 1084 ; # 1077 ; # 1085 ; # 1090 ; # 1072 ; # 1056 ; # 1077 ; # 1092 ; # 1077 ; # 1088 ; # 1072 ; # 1090 ; # 1087 ; # 1086 ; # 1040 ; # 1085 ; # 1075 ; # 1083 ; # 1080 ; # 1081 ; # 1089 ; # 1082 ; # 1086 ; # 1084 ; # 1091 ; # 1103 ; # 1079 ; # 1099 ; # 1082 ; # 1091 ; # 1090 ; # 1077 ; # 1084 ; # 1072 ; : Banks # 1042 ; # 1099 ; # 1087 ; # 1086 ; # 1083 ; # 1085 ; # 1080 ; # 1083 ; : # 1055 ; # 1077 ; # 1090 ; # 1088 ; # 1086 ; # 1074 ; # 1050 ; . # 1042 ; . # 1055 ; # 1088 ; # 1077 ; # 1087 ; # 1086 ; # 1076 ; # 1072 ; # 1074 ; # 1072 ; # 1090 ; # 1077 ; # 1083 ; # 1100 ; : # 1052 ; # 1072 ; # 1088 ; # 1090 ; # 1080 ; # 1088 ; # 1086 ; # 1089 ; # 1086 ; # 1074 ; # 1072 ; # 1042 ; . # 1043 ; . # 1052 ; # 1086 ; # 1089 ; # 1082 ; # 1074 ; # 1072 ; 2011 What is the Banks History? Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich metropoliss in the North like Florence, Venice and Genoa. The Bardi and Peruzzi households dominated banking in fourteenth century Florence, set uping subdivisions in many other parts of Europe. Possibly the most celebrated Italian bank was the Medici bank, set up by Giovanni Medici in 1397. The earliest known province sedimentation bank, Banco di San Giorgio ( Bank of St. George ) , was founded in 1407 at Genoa, Italy. Banks can be traced back to antediluvian times even before money when temples were used to hive away trade goods. During the third century AD, Bankss in Persia and other districts in the Iranian Sassanid Empire issued letters of recognition known as # 7778 ; akks. Moslem bargainers are known to hold used the check or # 7779 ; akk system since the clip of Harun al-Rashid ( 9th century ) of the Abbasid Caliphate. In the ninth century, a Muslim man of affairs could hard currency an early signifier of the check in China drawn on beginnings in Baghdad, a tradition that was significantly strengthened in the 13th and 14th centuries, during the Mongol Empire. Fragments found in the Cairo Geniza indicate that in the twelfth century checks unusually similar to our ain were in usage, merely smaller to salvage costs on the paper. They contain a amount to be paid and so the order May so and so pay the carrier such and such an sum . The day of the month and name of the issuer are besides evident. Beginning of the word The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank bench, counter . Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to do their minutess atop desks covered by green tablecloths The earliest grounds of money-changing activity is depicted on a Ag Greek dram coin from ancient Hellenic settlement Trapezus on the Black Sea, modern Trabzon, c. 350 # 8211 ; 325 BC, presented in the British Museum in London. The coin shows a banker s tabular array ( trapeza ) laden with coins, a wordplay on the name of the metropolis. In fact, even today in Modern Greek the word Trapeza ( # 932 ; # 961 ; # 940 ; # 960 ; # 949 ; # 950 ; # 945 ; ) means both a tabular array and a bank. What is a bank? Harmonizing to Britannica, a bank is: an establishment that trades in money and its replacements and provides other fiscal services. Banks accept sedimentations and do loans and deduce a net income from the difference in the involvement rates paid and charged, severally. Banks are critical to our economic system. The primary map of Bankss is to set their history holders money to utilize by imparting it out to others who can so utilize it to purchase places, concerns, send childs to college When you deposit your money in the bank, your money goes into a large pool of money along with everyone else s, and your history is credited with the sum of your sedimentation. When you write cheques or do backdowns, that sum is deducted from your history balance. Interest you earn on your balance is besides added to your history. Banks create money in the economic system by doing loans. The sum of money that Bankss can impart is straight affected by the modesty demand set by the Federal Reserve. The modesty demand is presently 3 per centum to 10 per centum of a bank s entire sedimentations. This sum can be held either in hard currency on manus or in the bank s modesty history with the Fed. To see how this affects the economic system, think about it like this. When a bank gets a sedimentation of $ 100, presuming a modesty demand of 10 per centum, the bank can so impart out $ 90. That $ 90 goes back into the economic system, buying goods or services, and normally ends up deposited in another bank. That bank can so impart out $ 81 of that $ 90 sedimentation, and that $ 81 goes into the economic system to buy goods or services and finally is deposited into another bank that proceeds to impart out a per centum of it. In this manner, money grows and flows throughout the community in a much greater sum than physically exists. That $ 100 makes a much larger rippling in the economic system than you may recognize! Why does it work? Banking is all about trust. We trust that the bank will hold our money for us when we go to acquire it. We trust that it will honour the cheques we write to pay our measures. The thing that s difficult to hold on is the fact that while people are seting money into the bank every twenty-four hours, the bank is imparting that same money and more to other people every twenty-four hours. Banks systematically extend more recognition than they have hard currency. That s a small chilling ; but if you go to the bank and demand your money, you ll acquire it. However, if everyone goes to the bank at the same clip and demands their money ( a tally on the bank ) , there might be job. Even though the Federal Reserve Act requires that Bankss maintain a certain per centum of their money in modesty, if everyone came to retreat their money at the same clip, there would nt be plenty. In the event of a bank failure, your money is protected every bit long as the bank is insured by the Federal Deposit Insurance Corporation ( FDIC ) . The key to the success of banking, nevertheless, still lies in the assurance that consumers have in the bank s ability to turn and protect their money. Because Bankss rely so to a great extent on consumer trust, and trust depends on the perceptual experience of unity, the banking industry is extremely regulated by the authorities. Types of Banks There are several types of banking establishments, and ab initio they were rather distinguishable. Commercial Bankss were originally set up to supply services for concerns. Now, most commercial Bankss offer histories to everyone. Savingss Bankss, nest eggs and loans, concerted Bankss and recognition brotherhoods are really classified as thrift establishments. Each originally concentrated on meeting specific demands of people who were non covered by commercial Bankss. Savingss Bankss were originally founded in order to supply a topographic point for lower-income workers to salvage their money. Savingss and loan associations and concerted Bankss were established during the 1800s to do it possible for mill workers and other lower-income workers to purchase places. Credit brotherhoods were normally started by people who shared a common bond, like working at the same company ( normally a mill ) or populating in the same community. The recognition brotherhood s chief map was to supply exigency loans for people who could nt acquire loans from traditional loaners. These loans might be for things like medical costs or place fixs. Now, even though there is still a distinction between Bankss and thrifts, they offer many of the same services. Commercial Bankss can offer auto loans, thrift establishments can do commercial loans, and recognition brotherhoods offer mortgages! How do Bankss do money? Banks are merely like other concerns. Their merchandise merely happens to be money. Other concerns sell doodads or services ; Bankss sell money in the signifier of loans, certifications of sedimentation ( CDs ) and other fiscal merchandises. They make money on the involvement they charge on loans because that involvement is higher than the involvement they pay on depositors histories. The involvement rate a bank charges its borrowers depends on both the figure of people who want to borrow and the sum of money the bank has available to impart. As was mentioned in the old subdivision, the sum available to impart besides depends upon the modesty requirement the Federal Reserve Board has set. At the same clip, it may besides be affected by the financess rate, which is the involvement rate that Bankss charge each other for short-run loans to run into their modesty demands. Check out How the Fed Works for more on how the Fed influences the economic system. Lending money is besides inherently hazardous. A bank neer truly knows if it ll acquire that money back. Therefore, the riskier the loan the higher the involvement rate the bank charges. While paying involvement may non look to be a great fiscal move in some respects, it truly is a little monetary value to pay for utilizing person else s money. Im agine holding to salvage all of the money you needed in order to purchase a house. We would nt be able to purchase houses until we retired! Banks besides charge fees for services like look intoing, ATM entree and overdraft protection. Loans have their ain set of fees that go along with them. Another beginning of income for Bankss is investings and securities. Loans, Checks and Savingss Banks offer tonss of fiscal merchandises for their depositors. They offer look intoing histories, loans, certifications of sedimentations and money market histories, non to advert traditional nest eggs histories. Some besides allow you to put up single retirement histories ( IRAs ) and other retirement or instruction nest eggs histories. There are, of class, other types of histories being offered at Bankss across the state, but these are the most common 1s. What are the differences in these most common types of histories? Savingss histories The most common type of history, and likely the first history you of all time had, is a savings history. These histories normally require either a low minimal balance or have no minimal balance demand, and let you to maintain your money in a safe topographic point while it earns a little sum of involvement each month. In standard pattern, there are no limitations on when you can retreat your money. Checking histories This is another common history most everyone has. It s convenient because it lets you buy things without holding to worry about transporting the hard currency or utilizing a recognition card and paying its involvement. While most look intoing histories do non pay involvement, some do these are referred to as negotiable order of backdown ( NOW ) histories. Some say that cheques have been around since about 352 B.C. in the Roman Empire. It appears that cheques truly started going popular in Holland in the 1500 to 1600s. Dutch tellers provided an alternate to maintaining big sums of hard currency at place and agreed to keep depositors money for safekeeping. For a fee, they would pay the depositors debts from the history based on a note that the depositor would compose sounds a batch like a cheque! Today s Bankss do the same thing. It became a little more complicated when tonss of Bankss became involved and money needed to be shifted from one bank to the following. To do things easier, Bankss now have a system of cheque clearinghouses. Banks either send cheques through the Federal Reserve or utilize a private clearinghouse to reassign the financess and clear the cheque. Here is a diagram of how that works. Money market accounts A money market history ( MMA ) is an interest-earning nest eggs account with limited dealing privileges. You are normally limited to six transportations or backdowns per month, with no more than three minutess as cheques written against the history. The involvement rate paid on a money market history is normally higher than that of a regular bankbook nest eggs rate. Money market histories besides have a minimal balance demand. # 183 ; Certificates of sedimentation These are histories that allow you to set in a specific sum of money for a specific period of clip. In exchange for a higher involvement rate, you have to hold non to retreat the money for the continuance of the fixed clip period. The involvement rate alterations based on the length of clip you decide to go forth the money in the history. You ca nt compose cheques on certifications of sedimentation. This agreement non merely gives the bank money they can utilize for other intents, but it besides lets them cognize precisely how long they can utilize that money. # 183 ; Individual retirement histories and instruction nest eggs histories These types of histories require that you maintain your money in the bank until you reach a certain age or your child enters college. There can be punishments with these types of histories, nevertheless, if you use the money for something other than instruction, or if you withdraw the money prior to retirement age. bank money altering fiscal Banking in Russia Short History Prior to 1861, the growing of private nest eggs was limited by the fact that the bulk of Russia s population was composed of helot, agricultural labourers who were tied to the land and had few personal freedoms. The lone people likely to take advantage of personal nest eggs histories came from a little category of urban merchandisers and craftsmen. In 1862, there were merely 140,000 sedimentation histories numbering 8.5 million rubles in a state of 70 million people. After the abolishment of serfhood in 1861, savings histories became more widespread. Growth was peculiarly rapid in the eightiess, when the cardinal offices at the Central Bank were supplemented by regional offices at local exchequers and telegraph Stationss. Savingss offices opened in rural small towns every bit good as urban centres, taking to a sum of 4,000 subdivisions and two million single histories in 1895. Soviet period Soviet period In Vladimir Lenin s position, Bankss were an of import model for the edifice of a socialist society. He believed the ready-made large Bankss of capitalist economy could be converted into an effectual setup for province control of the economic system. However, banking activities land to a arrest in the pandemonium of the old ages instantly following the revolution. All commercial Bankss closed down in October 1917. Their staff received wages but were instructed non to execute any banking maps in the hope that economic palsy would convey down the Bolshevik government. Nevertheless, by the terminal of the twelvemonth, the Bolsheviks had succeeded in nationalising all commercial Bankss, directing armed withdrawals to busy their offices in Petrograd. While concern histories were confiscated, private nest eggs histories were respected. Commissar of Finance V. Menzhinsky ordered the re-establishment of the Department of Savings Offices. However, his attempts to keep the private nest eggs sy stem failed during the period of Revolution from 1918 to 1921. Throughout those old ages, farm and consumer goods were requisitioned, about all money was withdrawn from the economic system, and the exchange of goods operated on a swap system. Russian period Russian period The modern Russia inherited the banking system of the Soviet Union, with a few large province Bankss ( like Sberbank, Vneshekonombank, and Vneshtorgbank ) . After more than 15 old ages of reforms in Russia, there are now 1183 fiscal establishments with 3286 regional subdivisions. On March 22, 1991, the Central Bank of Russia established the process for the issue of securities by commercial Bankss. From that clip, Russian Bankss gained an mercantile establishment to the stock market. On April 2, 1991 the Regulations for Buying and Selling ( Transfering ) Currency Exports Abroad through Citizens Personal Fundss approved by the State Bank of the USSR entered into force. In this manner, the creative activity of the Russian foreign exchange market began. And on April 9, the first auctions on the State Bank s currency exchange were held. Ten commercial Bankss and one fiscal organisation took portion. Recognition and Debit cards At the terminal of 2008, there were 119 million bank cards in circulation in Russia. How can we make payments without hard currency money? # 183 ; Credit cards A recognition card is a little plastic card issued to users as a system of payment. It allows its holder to purchase goods and services based on the holder s promise to pay for these goods and services. [ 1 ] The issuer of the card creates a revolving history and grants a line of recognition to the consumer ( or the user ) from which the user can borrow money for payment to a merchandiser or as a hard currency progress to the user. # 183 ; Internet # 183 ; WEB money Information beginning 1. hypertext transfer protocol: //en.wikipedia.org 2. hypertext transfer protocol: //theunjustmedia.com 3. hypertext transfer protocol: //www.pocumd.org 4. hypertext transfer protocol: //money.howstuffworks.com 5. hypertext transfer protocol: //www.infoplease.com 6. www.google.com Wordss and phrases Substitutes # 1079 ; # 1072 ; # 1084 ; # 1077 ; # 1085 ; # 1080 ; # 1090 ; # 1077 ; # 1083 ; # 1080 ; make money # 1079 ; # 1072 ; # 1088 ; # 1072 ; # 1073 ; # 1072 ; # 1090 ; # 1099 ; # 1074 ; # 1072 ; # 1090 ; # 1100 ; # 1076 ; # 1077 ; # 1085 ; # 1100 ; # 1075 ; # 1080 ; demand # 8211 ; # 1090 ; # 1088 ; # 1077 ; # 1073 ; # 1086 ; # 1074 ; # 1072 ; # 1085 ; # 1080 ; # 1077 ; , # 1085 ; # 1077 ; # 1086 ; # 1073 ; # 1093 ; # 1086 ; # 1076 ; # 1080 ; # 1084 ; # 1086 ; # 1077 ; # 1091 ; # 1089 ; # 1083 ; # 1086 ; # 1074 ; # 1080 ; # 1077 ; ripple- # 1087 ; # 1091 ; # 1083 ; # 1100 ; # 1089 ; # 1072 ; # 1094 ; # 1080 ; # 1103 ; imparting # 1082 ; # 1088 ; # 1077 ; # 1076 ; # 1080 ; # 1090 ; # 1086 ; # 1074 ; # 1072 ; # 1085 ; # 1080 ; # 1103 ; modesty # 1088 ; # 1077 ; # 1079 ; # 1077 ; # 1088 ; # 1074 ; thriftinstitutions # 1089 ; # 1073 ; # 1077 ; # 1088 ; # 1077 ; # 1075 ; # 1072 ; # 1090 ; # 1077 ; # 1083 ; # 1100 ; # 1085 ; # 1099 ; # 1093 ; # 1091 ; # 1095 ; # 1088 ; # 1077 ; # 1078 ; # 1076 ; # 1077 ; # 1085 ; # 1080 ; # 1081 ; involvement # 8211 ; # 1087 ; # 1088 ; # 1086 ; # 1094 ; # 1077 ; # 1085 ; # 1090 ; , # 1076 ; # 1086 ; # 1083 ; # 1103 ; rate # 8211 ; # 1089 ; # 1090 ; # 1072 ; # 1074 ; # 1082 ; # 1072 ; , # 1082 ; # 1091 ; # 1088 ; # 1089 ; fees # 1089 ; # 1073 ; # 1086 ; # 1088 ; # 1099 ; Investments # 1048 ; # 1085 ; # 1074 ; # 1077 ; # 1089 ; # 1090 ; # 1080 ; # 1094 ; # 1080 ; # 1080 ; Loans # 8211 ; # 1082 ; # 1088 ; # 1077 ; # 1076 ; # 1080 ; # 1090 ; , # 1079 ; # 1072 ; # 1077 ; # 1084 ; Withdrawal # 8211 ; # 1074 ; # 1099 ; # 1074 ; # 1086 ; # 1076 ; , # 1089 ; # 1085 ; # 1103 ; # 1090 ; # 1080 ; # 1077 ; , # 1072 ; # 1085 ; # 1085 ; # 1091 ; # 1083 ; # 1080 ; # 1088 ; # 1086 ; # 1074 ; # 1072 ; # 1085 ; # 1080 ; # 1077 ; Rapid # 8211 ; # 1073 ; # 1099 ; # 1089 ; # 1090 ; # 1088 ; # 1099 ; # 1081 ; , # 1089 ; # 1082 ; # 1086 ; # 1088 ; # 1099 ; # 1081 ; economicparalysis # 1101 ; # 1082 ; # 1086 ; # 1085 ; # 1086 ; # 1084 ; # 1080 ; # 1095 ; # 1077 ; # 1089 ; # 1082 ; # 1086 ; # 1075 ; # 1086 ; # 1087 ; # 1072 ; # 1088 ; # 1072 ; # 1083 ; # 1080 ; # 1095 ; # 1072 ; abartersystem # 1073 ; # 1072 ; # 1088 ; # 1090 ; # 1077 ; # 1088 ; # 1085 ; # 1086 ; # 1081 ; # 1089 ; # 1080 ; # 1089 ; # 1090 ; # 1077 ; # 1084 ; # 1099 ; consumer # 1087 ; # 1086 ; # 1090 ; # 1088 ; # 1077 ; # 1073 ; # 1080 ; # 1090 ; # 1077 ; # 1083 ; # 1100 ; issued # 8211 ; # 1074 ; # 1099 ; # 1087 ; # 1091 ; # 1097 ; # 1077 ; # 1085 ; # 1085 ; # 1099 ; # 1081 ; , # 1080 ; # 1079 ; # 1076 ; # 1072 ; # 1085 ; # 1085 ; # 1099 ; # 1081 ;