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A bank is a financial institution that accepts deposits and makes loans. The bank has a unique, characteristic balance sheet showing long-term assets (loans) offset by short-term liabilities (deposits). Any other company would be insolvent with the balance sheet of a bank. Resolving this mismatch of borrowers’ and savers’ time horizons is the function of a bank. Bank oversight (i.e. FDIC) tries to reduce bank failures from the inherent risk. The US bank thus faces vigorous competition, compelling it to offer a wide range of convenient services such as taking deposits, issuing checking and savings accounts, lending money, cashing checks, providing wire transfers, issuing cashiers checks, debit cards and credit cards, providing safe deposit boxes plus a network of ATMs, and offering online banking. |
