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GOVT. AND BANKING

Discover how banks work, from receiving deposits to making loans and encouraging savings. Learn about different types of banks and the government's role in banking.

judyhoward
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GOVT. AND BANKING

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  1. GOVT. AND BANKING • CE.12c • MR. COLLINS & MRS. KOZLIK

  2. WHAT DO BANKS DO? • BANKS RECEIVE DEPOSITS—BANKS USE THIS MONEY FOR LOANS • BANKS MAKE LOANS • COLLATERAL • PAY INTEREST • BANKS ENCOURAGE SAVING AND INVESTING BY PAYING INTEREST ( A FEE) ON THE USE OF THEIR DEPOSITS

  3. TYPES OF BANKS • COMMERCIAL BANKS: RECEIVE DEPOSITS AND MAKE LOANS • SAVINGS AND LOANS: OFFER CHECKING ACCOUNTS AND SAFE DEPOSIT BOXES • CREDIT UNIONS: USED BY MEMBERS OF UNIONS OR BUSINESSES • SECURITIES BROKERAGES: HANDLES STOCKS AND INVESTMENTS

  4. GOVT’S. ROLE IN BANKING • FEDERAL RESERVE SYSTEM: THE GOVT’S. BANK. COMMERCIAL BANKS DO BUSINESS WITH THE FEDERAL RESERVE • FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) & FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC): INSURE DEPOSITORS FROM LOSING LIFE SAVINGS IF BANK FAILS

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