Everyone knows about the existence of the concept "bank", but not many have thought about it. Most mean by this term a store of money. However, this definition does not reveal the essence of the bank as a credit institution, does not give an idea of its role in the national economy.
Instructions
Step 1
The bank's activities are so multifaceted that it is very difficult to identify its essence. In modern conditions, banks perform an extensive list of operations. They organize money circulation and credit relations, finance various sectors of the economy, buy and sell securities, provide consulting services and even own enterprises.
Step 2
The most common opinion about a bank is its definition as an institution or organization. Of course, the bank performs a public function, but it has little relation to such terms, since an organization is a collection of people united by common goals (charitable organization, public organization). Banks, on the other hand, were historically created by an individual and only later turned into associations.
Step 3
The bank is closer to the enterprise. He is an independent economic entity, has the rights of a legal entity, produces and sells a product, operates on the principles of cost accounting. The bank, like an enterprise, solves the issues of meeting social needs, selling manufactured products and making a profit. Like any other business, the bank must have permission to conduct its activities.
Step 4
A bank is a trading company. This interpretation of the concept follows from the fact that the bank operates in the field of exchange, not production. The association of a bank and a commercial enterprise is not accidental. After all, the bank really sells and buys resources. It has its own sellers, warehouse (storehouse of valuables), buyers.
Step 5
A bank is a credit company. Historically, it functioned as a credit center. The bank is one of the parties to the credit relationship, which can act both as a borrower and as a lender. By its nature, a bank is associated with monetary and credit relations. It was on their basis that it arose.
Step 6
In general, banks can be characterized as a system of special enterprises, the product of which is the credit and issuance business. The basis of the bank's activities is the organization of the monetary process and the issue of banknotes.
