BANK

A bank is an institution that provides financial service, particularly taking

deposits and extending credit.

Currently the term bank is generally understood as an institution that holds a

banking license. Banking licenses are granted by bank regulatory authorities
and provide rights to conduct the most fundamental banking services such as
accepting deposits and making loans. There are also financial institutions that
provide certain banking services without meeting the legal definition of a bank,
are so called non-banking financial company.

Banks have a long history, and have influenced economies and politics for
centuries.

The word bank is derived from the Italian banca, which is derived from a
Germanic language and means bench. The terms bankrupt and “broke” are
similarly derived from banca rota, which refers to an outof-business bank,
having its bench physically broken. Money lenders in Northern Italy originally
did business in open areas, or big open rooms, with each lender working from
bench or table.

Traditionally, a bank generates profits from transaction fees on financial

services and from the interest it charges for lending. In recent history, with
historically low interest rates limiting bank’s ability to earn money by lending
deposited funds, much of a bank’s income is provided by overdraft fees and
riskier investments.