Title The principle of banking ✅

INTRODUCTION TO BANKING Commercial bank Life Insurance company Assets: Loan (main income) Liabilities: deposits (from customers: demand deposit (can withdraw at any time) Use short-term funds to earn money Only banks can obtain deposit Assets: receive money from customers and invest in securities market, give out long-term loans -> securities (>30% of the assets), loans Liabilities: insurance policy Regulator: ministry of finance Commercial banks - Regulator: central bank - Obtain funds and providing loan service - Economic function: reduce asymmetric information + Adverse selection: before transactgion -> strategy: increase interest rate, screening, collateral