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A bank is a financial institution that accepts deposits from the public and uses those deposits to create credit and make loans. Banks play an important role in the financial system and are highly regulated. Regulations require banks to hold reserve assets that are a portion of their total liabilities. Banks earn revenue primarily from interest on loans but also fees and financial advice. Revenue streams have become more diversified over time as profitability from lending can vary with the economic cycle.

Author

Shaswat Jain

Language

EN