If the central bank can act as a lender of last resort during a banking panic, banks can satisfy customer withdrawal needs and eventually restore the public's faith in the banking system.
A financial institution is a monetary group certified to receive deposits and make loans. There are several varieties of banks inclusive of retail, commercial, and investment banks. In maximum nations, banks are regulated by using countrywide authorities or vital financial institutions.
Although banks do many things, their number one position is to soak up funds—called deposits—from people with money, pool them, and lend them to individuals who need a price range. Banks are intermediaries among depositors (who lend money to the bank) and debtors (to whom the financial institution lends money).
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