3 ms·
The biggest reason for banks to exist is too provide "grease" for the economy, i.e. to connect people with money to people who needs to borrow :) Most banks he
by tyfon 3y ago
The biggest reason for banks to exist is too provide "grease" for the economy, i.e. to connect people with money to people who needs to borrow :)
Most banks here don't handle the actual payments themselves except the biggest ones.
The small "savings banks" like the one I work in doesn't have shareholders either, they are owned by the depositors. Almost every small town and community here has one.
- tomatocracy 3y agoThe most valuable service banks provide is not just "matchmaking" lenders with borrowers (an exchange of some sort can do that much more cheaply) or even spreading credit risk across a pool of borrowers (again there are other ways to do that which are cheaper), but maturity transformation: depositors can lend money to the bank which is repayable on demand, but the banks' borrowers are given set repayment schedules.