... trusts and other non-bank financial institutions. In many cases, these provide an adequate substitute to banks for lending savings to. Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks supplied funds to allow businesses to purchase inventory. They collected those funds back with interest, when the goods were sold. For years, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analysing the financial condition of their business clients to determine the level of risk in each loan transaction. Banking services have expanded to include services directed at individuals, and risk in these much smaller transactions are pooled. The economic functions of banks include: issuing of money; netting and settlement of payments; credit intermediation; credit quality improvement; and maturity transformation. In the past ...

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