Banking is the industry or system involved in the management of financial transactions and services. It encompasses a wide range of activities such as accepting deposits, granting loans, facilitating payments, and offering investment products. Banks serve as intermediaries between those who have excess money (depositors) and those who need money (borrowers), thereby playing a critical role in the economy by promoting savings, credit, and liquidity.
The primary types of banking include retail banking, which deals directly with consumers; commercial banking, focused on businesses; and investment banking, which specializes in raising capital and providing advisory services. Banks also offer services such as wealth management, insurance, and foreign exchange. Regulatory frameworks govern banking practices to ensure stability and protection for consumers and the financial system.
Overall, banking is essential for financial intermediation, economic growth, and the efficient allocation of resources in society.
Mistakes involving large sums can lead to potential financial catastrophes, highlighted by Citigroup's $81 trillion error. The incident was detected within ninety minutes and corrected swiftly without any funds leaving…