The core functions of banks

The core functions of banks

With the increasing acceptance of non-cash transactions, fractional reserve banking and central bank note issue of monopolies, the nature of money is changed and banking. Credit is quite simply the total amount of funds the bank (loans). Most of it existed in the form of banknotes and coins mark recognized as legal tender along with invisible money that existed only in the deposit account statements. The core functions of banks have become information gathering and risk management. The banks tried to maximize the difference between returns on their assets and expenses incurred on their obligations, and taking care to maintain adequate reserves and avoid running the bank.