Functions of the Banking System

Topics: Bank, Cheque, Investment Pages: 1 (250 words) Published: November 12, 2012
What are the differences between commercial and investment banking? The difference between investment banks and commercial banks is the products and services each offer. Commercial banks accept deposits and make loans for small businesses and consumers. Investment banks offer investment products, securities, and offer financial advice for consumers. Investment banks focus on businesses and governments and commercial banks focus on consumers. What types of services and products do commercial banks provide? Commercial banks offer checking, savings, IRA, CD’s, credit cards, and home, auto, and personal loans. They also offer online banking, bill pay, wire transfers, and financial advice. What types of services and products do investment banks provide? Investments banks offer financial advice, selling and trading stocks, pension and retirement plans, and mutual funds. What are the five functions that the banking system performs? The five functions of the banking system are accepting deposits, granting loans, issuing checkable deposit accounts, clearing checks, and creating deposit money.. What is universal banking?

Universal banking is the sixth function of the banking system that involves investment banking which raises funds for companies. What types of charters can U.S. banks obtain?
Banks can obtain federal and state charters.
What types of depository protection exist for U.S. banks?
Deposit protections available for U.S. banks are: Federal Deposit Insurance Corporation (FDIC), Federal Savings and Loan Insurance Corporation, and the National Credit Union Share Insurance Fund (NCUSIF) What are two ways banks can fail?

Two reasons banks fail are bad investments and loans.
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