Friday, 18 September, 2020

Money and Credit |Banking Explained


Definition of Money

The international banking system is a mystery. There are over 30,000 banks worldwide. They carry an incredible amount of property. Only the top ten banks own nearly $ 25 trillion. Today, the money and credit banking industry can be more sophisticated. Although originally, the idea was to make life simpler In the eleventh century, Italy was a center of European trading. Merchants from across continents meet to trade their merchandise.

Money and Credit

However, there was one problem: Too many currencies while trading At Pisa, traders had to deal with seven types of different currencies. They constantly exchange their money. This trade, which usually took place in the open air on benches, he is the one from whom we got the word “bank”. From the word “Banco”, the Italian word for seat. Travel risks, forgery of money, and difficulty obtaining a loan. It made people think. It is time for a new business model. Foreclosure brokers started giving money and credit to businessmen, While Genus City merchants have developed non-cash payments Bank networks are distributed around the world to distribute money and credit / balance. Even to the church, or European kings What about today?

In short, banks are in risk management It’s a simplified version of the way you work. People save their money in banks and receive a small amount of interest. The bank takes this money and lends it at a much higher interest rate. It is a calculated risk, as some lenders will default. This process is fundamental to our economic system, because it provides people with the resources to buy things like homes, or an industry to expand their business and growth.

Thus banks take unused funds / financial resources through their savers. They turn them into money that society can use to do things. Other sources of income include banks accepting savings deposits, making credit cards, buying and selling currencies, Secretary work, money management services. The main problem with banks now is many of them have abandoned their traditional role. As funders of long-term financial products in favor of short-term gains, that carries much higher risks. During the financial boom, many major banks adopted Financial contracts that were hardly comprehensive / understandable. They did their own business trying to make money faster And CEOs and dealers earn millions in bonuses. Which is absolutely nothing less than gambling. The destruction of the economic system and societies like going back to 2008. When banks like Lehman Brothers were giving money and credit to anyone wanted to buy a house, Consequently, the bank was placed in a very risky position. This led to the collapse of the housing market in the United States and parts of Europe causing a fall in stock prices. That finally led to a global banking crisis and one of the biggest financial crises in history.

Hundreds of billions of dollars evaporated millions of people lost their work and money. Many major global banks have to pay billions in fines. The bankers / bankers became one of the least trusted professionals. The United States government and the European Union had to come up with a massive rescue plan together to buy bad property and stop bankruptcy. New laws were put into effect to regulate banking. Mandatory bank emergency funds have been applied to absorb shocks in the event of another financial crisis. However, other forms of difficult new legislation were successfully blocked through the banking lobby. Today, other forms of financial supply are winning very quickly. Like large investment banks, which are responsible for annual fees and do not receive commission on sales. This provides the incentive to deal with the best benefits for their clients or the Credit Union: The Cooperative Initiative Founded in the Nineteenth Century to dodge the credit penny. In short, they provide the same financial services as banks, But they focus on shared value, rather than maximizing profit.

The self-declared goal is to help individuals create opportunities such as starting a small business, Expanding fields, or building family homes while investment returns to communities. They are controlled by their own individuals who democratically elect the board of directors. Worldwide, credit union systems differ significantly. Starting with a few members to organizations that deserve many billions of US dollars and hundreds of thousands of members. Focus on profits for their members. It affects the risk that credit unions want to take. Which explains why the credit unions, although also harmful. The last financial crisis saved better than traditional banks. In order not to forget the crackdown on the project financing system in the current years, regardless of creating the most amazing video games possible. Platforms have been created that enable people to obtain loans from large groups of small investors. Dodging the bank as a broker / broker But it also works as an industry. Many modern technology companies have started with the Kick starter or Indigojo system. The funded individual gets satisfied by being part of something larger, and he can invest the ideas that they believe in.

Whereas dangerous spread is widespread. If the project fails, the loss is limited and last, but not least: micro credit A lot of very small loans, It is almost spent in developing countries that help people escape poverty; People that were previously unable to find a way For the money they need to start a business Because they were considered unworthy of time Now, small loans are being developed to work in billions of dollars Therefore, banking may not be able to raise your street prices But the bank’s role is to provide financing for people and businesses Essential for society to be done.

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