Banking system - Financial definition
Concise definition of the term banking system
The banking system refers to the network of institutions that provide financial services, including the acceptance of deposits, provision of loans, and facilitation of payment systems.
Comprehensive definition of the term banking system
The banking system is a crucial component of the financial sector, encompassing commercial banks, central banks, and other financial institutions that offer a range of services such as deposit-taking, lending, and investment products. Central banks regulate the system to ensure stability, manage monetary policy, and oversee the money supply.
Practical examples include commercial banks offering mortgages and business loans, investment banks underwriting securities, and central banks conducting open market operations to control inflation. Market practices within the banking system also involve risk management, compliance with regulatory frameworks, and the implementation of innovative financial technologies to improve service delivery and efficiency.