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55-466: Chief economists work primarily in banks and government institutions. By the 2010s, the chief economist position was established at large internet companies such as Google and Microsoft . Further, a trend began in data and financial services companies to utilize chief economists in customer- and media-facing roles to help in placing data in a larger economic context. In the European Union (EU),

110-412: A bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account. Banks issue new money when they make loans. In contemporary banking systems, regulators set a minimum level of reserve funds that banks must hold against the deposit liabilities created by

165-452: A cloister of the church, and continued after the death of the patron in 1445 and the architect in 1446; work was interrupted by the Pazzi plot and the chapel was never completed. Palazzo Pazzi or Palazzo Pazzi-Quaratesi was the main seat of the family in the "Canto dei Pazzi", at the intersection of Borgo degli Albizi  [ it ] and via del Proconsolo  [ it ] . It

220-425: A large number of small to medium-sized institutions in its banking system. As of November 2009, China's top four banks have in excess of 67,000 branches ( ICBC :18000+, BOC :12000+, CCB :13000+, ABC :24000+) with an additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branches – more than double

275-416: A safe and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default . Thus the goldsmiths of London became the forerunners of banking by creating new money based on credit. The Bank of England originated the permanent issue of banknotes in 1695. The Royal Bank of Scotland established the first overdraft facility in 1728. By

330-399: A variety of different ways including interest, transaction fees and financial advice. Traditionally, the most significant method is via charging interest on the capital it lends out to customers. The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference

385-446: Is a bank regulation , which sets a framework within which a bank or depository institution must manage its balance sheet . The categorisation of assets and capital is highly standardised so that it can be risk weighted . After the financial crisis of 2007–2008 , regulators force banks to issue Contingent convertible bonds (CoCos). These are hybrid capital securities that absorb losses in accordance with their contractual terms when

440-400: Is a Bills of Exchange Act that codifies the law in relation to negotiable instruments , including cheques, and this Act contains a statutory definition of the term banker : banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that

495-403: Is a list of the largest deals in history in terms of value with participation from at least one bank: Currently, commercial banks are regulated in most jurisdictions by government entities and require a special bank license to operate. Usually, the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits, even if they are not repayable to

550-431: Is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle . Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance. In

605-605: The Basel Accords . Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but, in many ways, functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world . In the history of banking , a number of banking dynasties  – notably, the Medicis , the Pazzi , the Fuggers ,

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660-705: The Federal Deposit Insurance Corporation (FDIC) as a regulator. However, for soundness examinations (i.e., whether a bank is operating in a sound manner), the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the primary federal regulator for national banks. State non-member banks are examined by the state agencies as well as

715-631: The Great Depression , the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub-prime mortgage crisis in the 2000s. The 2023 global banking crisis is the latest of these crises: In March 2023, liquidity shortages and bank insolvencies led to three bank failures in the United States , and within two weeks, several of the world's largest banks failed or were shut down by regulators Assets of

770-522: The Medici Bank , in 1397. The Republic of Genoa founded the earliest-known state deposit bank, and Banco di San Giorgio (Bank of St. George), in 1407 at Genoa , Italy. Fractional reserve banking and the issue of banknotes emerged in the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London , who possessed private vaults , and who charged a fee for that service. In exchange for each deposit of precious metal,

825-630: The Medici family as rulers of Florence. Sixtus gave tacit support to the conspirators. The assassination attempt was made during mass in the Florence Cathedral on 26 April 1478. Giuliano was killed; Lorenzo was wounded, but escaped. Salviati, with mercenaries from Perugia , failed in his attempt to take over the Palazzo della Signoria . Most of the conspirators were soon caught and summarily executed; five, including Francesco de' Pazzi, were hanged from

880-512: The Minister of International Trade . Export Development Canada and Business Development Canada both have Chief Economists too. Bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans . Lending activities can be directly performed by the bank or indirectly through capital markets . Whereas banks play an important role in financial stability and

935-751: The Ministry of Planning and National Development , one responsibility of which was to lead "a planning department or the Central Bureau of Statistics ". In the United States government, there are several Offices of the Chief Economist for different departments. For instance, the Office of the Chief Economist within the United States Department of State was first staffed in March 2012 by Heidi Crebo-Rediker , and

990-563: The Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. The definition of a bank varies from country to country. See the relevant country pages for more information. Under English common law , a banker is defined as a person who carries on the business of banking by conducting current accounts for their customers, paying cheques drawn on them and also collecting cheques for their customers. In most common law jurisdictions there

1045-577: The Welsers , the Berenbergs , and the Rothschilds  – have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is Berenberg Bank (founded in 1590). Banking as an archaic activity (or quasi-banking ) is thought to have begun as early as the end of the 4th millennium BCE, to

1100-454: The economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional-reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards,

1155-474: The 15,000 branches in the United Kingdom. Between 1985 and 2018 banks engaged in around 28,798 mergers or acquisitions, either as the acquirer or the target company. The overall known value of these deals cumulates to around 5,169 bil. USD. In terms of value, there have been two major waves (1999 and 2007) which both peaked at around 460 bil. USD followed by a steep decline (−82% from 2007 until 2018). Here

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1210-404: The 19th century, we find in ordinary cases of deposits, of money with banking corporations, or bankers, the transaction amounts to a mere loan, or mutuum , and the bank is to restore, not the same money, but an equivalent sum, whenever it is demanded and money, when paid into a bank, ceases altogether to be the money of the principal (see Parker v. Marchant, 1 Phillips 360); it is then the money of

1265-419: The 3rd millennia BCE. The present era of banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence , Lucca , Siena , Venice and Genoa . The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. Giovanni di Bicci de' Medici set up one of the most famous Italian banks,

1320-522: The FDIC. National banks have one primary regulator – the OCC. Each regulatory agency has its own set of rules and regulations to which banks and thrifts must adhere. The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions. Although

1375-505: The FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing. Pazzi The Pazzi were a powerful family in the Republic of Florence . Their main trade during the fifteenth century was banking. In the aftermath of the Pazzi conspiracy in 1478, members of the family were banished from Florence and their property

1430-802: The Office of the Chief Economist within the United States Department of Agriculture is led, as of 2014, by Joseph W. Glauber. From 2014-2016, the Chief Economist for the U.S. State Department was Rodney D. Ludema. The Chief Economist as of January 20, 2019 to present is Dr. Sharon Brown-Hruska . In Canada, the Office of the Chief Economist reports and advises on international trade and economic issues, including global, regional and sectoral trends and developments; and undertakes trade and economic research and analysis in support of Foreign Affairs, Trade and Development Canada's various functions: trade and investment policy, including negotiation of international agreements; international business development; and trade litigation. The post-holders are civil servants responsible to

1485-567: The UK, for example, the Financial Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland ) issue their own banknotes in addition to those issued by the Bank of England , the UK government's central bank. Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer  – defined as any entity for which

1540-639: The bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force within a particular jurisdiction may also modify the above terms or create new rights, obligations, or limitations relevant to the bank-customer relationship. Some types of financial institutions, such as building societies and credit unions , may be partly or wholly exempt from bank license requirements, and therefore regulated under separate rules. The requirements for

1595-411: The bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans). Banking crises have developed many times throughout history when one or more risks have emerged for the banking sector as a whole. Prominent examples include the bank run that occurred during

1650-667: The bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer , EFTPOS , and automated teller machines (ATMs). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits , and by issuing debt securities such as banknotes and bonds . Banks lend money by making advances to customers on current accounts, by making installment loans , and by investing in marketable debt securities and other forms of money lending. Banks provide different payment services, and

1705-456: The banker, who is bound to return an equivalent, by paying a similar sum to that deposited with him, when he is asked for it. The goldsmith paid interest on deposits. Since the promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were repayable over a longer time-period, this was an early form of fractional reserve banking . The promissory notes developed into an assignable instrument which could circulate as

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1760-704: The beginning of the 19th century Lubbock's Bank had established a bankers' clearing house in London to allow multiple banks to clear transactions. The Rothschilds pioneered international finance on a large scale, financing the purchase of shares in the Suez canal for the British government in 1875. The word bank was taken into Middle English from Middle French banque , from Old Italian banco , meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during

1815-515: The business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking. However, in many cases, the statutory definition closely mirrors the common law one. Examples of statutory definitions: Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking ,

1870-533: The capital of the issuing bank falls below a certain level. Then debt is reduced and bank capitalisation gets a boost. Owing to their capacity to absorb losses, CoCos have the potential to satisfy regulatory capital requirement. The economic functions of banks include: Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals in excess of available funds), credit risk (the chance that those who owe money to

1925-483: The cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques . Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers in

1980-512: The city. The historical basis of this legend has been in question since the work of Luigi Passerini Orsini de' Rilli  [ it ] in the mid-nineteenth century. The first apparently historical figure in the family is the Jacopo de' Pazzi il Vecchio  [ it ] who was a captain of the Florentine ( Guelph ) cavalry at the battle of Montaperti on 4 September 1260, and whose hand

2035-487: The city; he went to live at Torre a Decima, near Pontassieve . The family name and coat-of-arms were perpetually suppressed by decree of the Signoria . The name was erased from public registers, and all buildings and streets carrying it were renamed. Their shield with its dolphins was obliterated. Anyone named Pazzi had to take a new name; any man married to a Pazzi was barred from public office. Customs and traditions of

2090-423: The cross-selling of complementary products. Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Bank capital consists principally of equity , retained earnings and subordinated debt . Some of the main risks faced by banks include: The capital requirement

2145-408: The customer's order – although money lending, by itself, is generally not included in the definition. Unlike most other regulated industries, the regulator is typically also a participant in the market, being either publicly or privately governed central bank . Central banks also typically have a monopoly on the business of issuing banknotes . However, in some countries, this is not the case. In

2200-416: The family in 1464. Guglielmo di Antonio de' Pazzi married Bianca de' Medici , sister of Lorenzo de' Medici , in 1460; Cosimo de' Pazzi  [ it ] , the sixth of their sixteen children, became archbishop of Florence in 1508. Francesco de' Pazzi was one of the instigators of the Pazzi conspiracy in 1477–78. He, Jacopo de' Pazzi and Jacopo's brother Renato de' Pazzi were executed after

2255-590: The family were suppressed, among them the Easter Saturday ritual involving the flint from Jerusalem. After the overthrow of Piero de' Medici in 1494, members of the Pazzi family were able to return to Florence. The Pazzi Chapel in the Franciscan church of Santa Croce in Florence was commissioned by Andrea di Guglielmo de' Pazzi in 1429. It was designed by Filippo Brunelleschi . Construction began in 1442 in

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2310-589: The funding of these loans, in order to ensure that the banks can meet demands for payment of such deposits. These reserves can be acquired through the acceptance of new deposits, sale of other assets, or borrowing from other banks including the central bank. Activities undertaken by banks include personal banking , corporate banking , investment banking , private banking , transaction banking , insurance , consumer finance , trade finance and other related. Banks offer many different channels to access their banking and other services: A bank can generate revenue in

2365-407: The goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee ; these receipts could not be assigned, only the original depositor could collect the stored goods. Gradually the goldsmiths began to lend money out on behalf of the depositor , and promissory notes , which evolved into banknotes, were issued for money deposited as a loan to the goldsmith. Thus, by

2420-442: The issue of a bank license vary between jurisdictions but typically include: Banks' activities can be divided into: Most banks are profit-making, private enterprises. However, some are owned by the government, or are non-profit organisations . The United States banking industry is one of the most heavily regulated and guarded in the world, with multiple specialised and focused regulators. All banks with FDIC-insured deposits have

2475-409: The largest 1,000 banks in the world grew by 6.8% in the 2008–2009 financial year to a record US$ 96.4 trillion while profits declined by 85% to US$ 115 billion. Growth in assets in adverse market conditions was largely a result of recapitalisation. EU banks held the largest share of the total, 56% in 2008–2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during

2530-450: The legal basis for bank transactions such as cheques does not depend on how the bank is structured or regulated. The business of banking is in many common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business . When looking at these definitions it is important to keep in mind that they are defining

2585-455: The past 20 years, American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. This helps in making a profit and facilitates economic development as a whole. Recently, as banks have been faced with pressure from fintechs, new and additional business models have been suggested such as freemium, monetisation of data, white-labeling of banking and payment applications, or

2640-634: The plot failed. Raffaele de' Pazzi  [ it ] was a condottiere ; he died at the Battle of Ravenna in 1512. Maria Maddalena de' Pazzi (1566–1607) was a Carmelite nun and mystic ; she was canonised in 1669. Early in 1477, Francesco de' Pazzi , manager in Rome of the Pazzi bank, plotted with Girolamo Riario , nephew and protégé of the pope, Sixtus IV , and with Francesco Salviati , whom Sixtus had made archbishop of Pisa , to assassinate Lorenzo de' Medici and his brother Giuliano to oust

2695-620: The post of Chief Economist ( aka Chief Competition Economist) was created in 2003 as part of the European Commission , reporting to the Director General for Competition . This role is primarily focused on advising around the application of EU competition rules and providing input to legal cases before the European Courts. In Kenya, as of 1998, the role of chief economist was expressed as "Chief Economist/Statistician" and resided in

2750-452: The rotting head was mockingly used as a door-knocker. From there it was thrown into the Arno ; children fished it out and hung it from a willow tree, flogged it, and then threw it back into the river. The Pazzi were banished from Florence, and their lands and property confiscated. Guglielmo de' Pazzi, husband of Lorenzo's sister Bianca, was placed under house arrest, and later forbidden to enter

2805-465: The windows of the Palazzo della Signoria. Jacopo de' Pazzi, head of the family, escaped from Florence, but was caught and brought back. He was tortured, then hanged from the Palazzo della Signoria next to the decomposing corpse of Salviati. He was buried at Santa Croce , but the body was dug up and thrown into a ditch. It was then dragged through the streets and propped up at the door of Palazzo Pazzi, where

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2860-459: The year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment in banking totalled US$ 66.3 billion in 2009, up 12% on the previous year. The United States has the most banks in the world in terms of institutions (5,330 as of 2015) and possibly branches (81,607 as of 2015). This is an indicator of the geography and regulatory structure of the US, resulting in

2915-510: Was commissioned by Jacopo de' Pazzi, and built circa 1462–1472 to designs by Giuliano da Maiano . Above its traditionally rusticated ground floor of yellow-ochre sandstone , it had a then-novel stuccoed first and second floor, with delicate designs in the windows influenced by Brunelleschi . The central court is surrounded on three sides by round-headed arcading, with circular bosses in the spandrels . Palazzo Pazzi Ammannati  [ it ] (or Palazzo Pazzi dell'Accademia Colombaria)

2970-597: Was confiscated; the family name and coat-of-arms were permanently suppressed by order of the Signoria . The traditional story is that the family was founded by Pazzo di Ranieri, first man over the walls during the Siege of Jerusalem of 1099 , during the First Crusade , who returned to Florence with flints supposedly from the Holy Sepulchre , which were kept at Santi Apostoli and used on Holy Saturday to re-kindle fire in

3025-563: Was treacherously severed by Bocca degli Abati  [ it ] , causing the standard to fall. His son Pazzino di Jacopo de' Pazzi  [ it ] was a Black Guelph and a follower of Charles de Valois . Andrea di Guglielmo de' Pazzi (1372–1445) was a banker and merchant. In 1429 he commissioned construction of the Pazzi Chapel in the Franciscan church of Santa Croce in Florence. His son Jacopo de' Pazzi became head of

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