Problem 20

Introduction

A bank is a type of financial institution that takes deposits from the public, makes demand deposits, and loans money. The bank might utilize financial markets to carry out loan operations, either explicitly or indirectly. Banks are heavily controlled in most regimes due to their critical role in financial security and the economy. A system known as fractional reserve banking has been established in most nations, in which banks keep liquid assets equal to a proportion of their current obligations. The banking sector is one of the core sectors of the economy, as all the businesses are connected to the banking system in some way, for example, they have accounts, and have borrowed loans for businesses, etc.