http://www.noss123.com/
Role in the money supply
A bank raises funds by attracting deposits, borrowing money in the inter-bank market, or issuing financial instruments in the money market or a capital market. The bank then lends out most of these funds to borrowers.
However, it would not be prudent for a bank to lend out all of its
balance sheet. It must keep a certain proportion of its funds in
reserve so that it can repay depositors who withdraw their deposits. Bank reserves are typically kept in the form of a deposit with a central bank. This behaviour is called fractional-reserve banking and it is a central issue of monetary policy. Note that under Basel I (and the new round of Basel II), banks no longer keep deposits with central banks, but must maintain defined capital ratios.
[citation needed]
Size of global banking industry
Worldwide assets of the largest 1,000 banks grew 15.5% in 2005 to
reach a record $60.5 trillion. This follows a 19.3% increase in the
previous year. EU banks held the largest share, 50% at the end of 2005,
up from 38% a decade earlier. The growth in Europe's share was mostly
at the expense of Japanese banks whose share more than halved during
this period from 33% to 13%. The share of US banks also rose, from 10%
to 14%. Most of the remainder was from other Asian and European
countries.[citation needed]
The US had by far the most banks (7,540 at end-2005) and branches
(75,000) in the world. The large number of banks in the US is an
indicator of its geography and regulatory structure, resulting in a
large number of small to medium sized institutions in its banking
system. Japan had 129 banks and 12,000 branches. In 2004, Germany,
France, and Italy had more than 30,000 branches each—more than double
the 15,000 branches in the UK.[1]
