How do banks work?
Banks play a large role in the economy. This post will shed some light on banks and the role of central banks in the economy and how they could create major economic problems with monetary policy.
First, let’s start with the basics. A bank is a corporation that accepts deposits from customers and uses these funds to give loans. Banks offer interest to account owners and charge interest on loans and the difference between the amount of interest they get from loans and what they pay to account owners will be the bank profit.