banking system

Banking

The network of institutions and laws that provide a great variety of financial services. At its most basic, banking involves an institution holding money on behalf of customers that is payable to the customer on demand, either by appearing at the bank for a withdrawal or by writing a check to a third party. The banking system also provides loans to businesses and individuals. Many banks also perform other services for a fee; for instance, they offer certified checks to customers guaranteeing payment to third parties. In some countries, they may provide investment and insurance services. With the exception of Islamic banks, banking almost always involves the payment of interest on deposits and reception of interest on loans. Banking is regulated by the laws and central banks of individual countries.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

banking system

a network of COMMERCIAL BANKS and other more specialized BANKS (INVESTMENT BANKS, SAVINGS BANKS, MERCHANT BANKS) which accept deposits and savings from the general public, firms and other institutions, and which provide money transmission and other financial services for customers, operate loan and credit facilities for borrowers and invest in corporate and government securities. The banking system is part of a wider FINANCIAL SYSTEM and exerts a major influence on the functioning of the ‘money economy’ of a country Bank deposits occupy a central position in the country's MONEY SUPPLY and hence the banking system is closely regulated by the monetary authorities. See CENTRAL BANK, BANK OF ENGLAND, CLEARING HOUSE SYSTEM.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

banking system

a network of COMMERCIAL BANKS and other more specialized BANKS (INVESTMENT BANKS, SAVINGS BANKS, MERCHANT BANKS) that accept deposits and savings from the general public, firms and other institutions, and provide money transmission and other financial services for customers, operate loan and credit facilities for borrowers, and invest in corporate and government securities. The banking system is part of a wider FINANCIAL SYSTEM and exerts a major influence on the functioning of the ‘money economy’ of a country. Bank deposits occupy a central position in the country's MONEY SUPPLY and hence the banking system is closely regulated by the money authorities. See BANK OF ENGLAND, CENTRAL BANK, CLEARING HOUSE SYSTEM.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005