INSTRUCTURE PPT 1

What does the term 'banking' originate from?

The Latin term 'banca' or 'banque,' meaning 'bench' or 'table.'

What is the general definition of banking?

Banking is the business activity of accepting deposits and lending money or extending credit to individuals, businesses, and governments.

What does the Philippine General Banking Law of 2000 define banking as?

The business of receiving deposits from the public and using these funds for lending, investment, or both.

How does banking contribute to economic growth?

By facilitating the flow of funds from savers to borrowers.

What modern role does banking serve within the financial system?

It is a technology-driven service industry providing traditional and modern financial services.

What is a bank as a financial intermediary?

It connects those with surplus funds (savers) to those in need of funds (borrowers).

What is one way banks manage risk?

By pooling funds from many depositors to diversify risks associated with lending.

What is the role of banks in mobilizing savings?

To encourage individuals and businesses to save their excess funds.

How do banks facilitate transaction efficiency?

By enabling payments and settlements between parties, reducing the need for cash handling.

What are non-banking financial institutions (NBFIs)?

Entities that offer financial services but do not have a full banking license and cannot take deposits.

How do banks support entrepreneurship?

By providing loans, venture capital, and business support services to small and medium enterprises.

What is one way banks promote financial inclusion?

By offering microloans and accessible savings accounts to underserved communities.

How do financial institutions facilitate international trade?

By offering services like letters of credit, foreign exchange, and trade financing.

What is capital formation in banking?

Pooling savings from individuals and businesses for investment in the economy.

What is the economic significance of financial intermediation?

It promotes efficient allocation of resources, driving economic growth.

Define the academic perspective on banking according to Frederick H. Harbison.

An organized mechanism for pooling savings and channeling them into investments.

What function do banks serve in resource allocation?

They allocate funds to the most efficient and productive projects.

What is one way banks reduce transaction costs?

By eliminating the need for direct negotiation between savers and borrowers.

What service do banks offer to manage risk?

Products like insurance, derivatives, and hedging services.

How does banking contribute to job creation?

By providing access to finance for entrepreneurs to start and grow businesses.

What role do banks play in promoting economic stability?

By offering risk management products and reducing uncertainty.

Define the modern definition of banking.

A technology-driven service industry providing traditional and innovative financial services.

What is an important function of banks regarding deposits?

Accepting deposits and providing safekeeping.

What does 'banca rotta' mean?

It means 'broken bench,' and is the root of the modern term 'bankruptcy.'

What does banking involve beyond lending money?

Offering services like wealth management, payment processing, and financial advisory.

Why do banks assess creditworthiness?

To determine which projects and individuals to allocate funds to.

What is one way banks facilitate liquidity?

By ensuring that depositors can access their money when needed.

How do banks assist individuals in financial planning?

By providing tailored financial solutions for future financial security.

What defines a financial institution?

An organization providing financial services and products to individuals, businesses, and governments.

How do banks contribute to economic development?

By mobilizing savings and facilitating investment in economic activities.

What does the historical context of banking highlight about its origins?

It began with money changers in Italy using benches for financial transactions.

What is one product banks offer to facilitate payments?

Checking accounts.

According to Paul Samuelson, what is the essence of banking?

A system of financial intermediation mobilizing funds from surplus to deficit units.

What do banks provide to mitigate financial loss?

A diversified pool of funds from many depositors.

How do banks enable economic growth through investments?

By providing loans to businesses for expansion and innovation.

What is a bank’s role in financial advisory?

To offer guidance to businesses and individuals for better financial decisions.

What impact do banks have on reducing market volatility?

By offering risk management services that mitigate risks.

What was the function of benches in medieval banking?

They were used for displaying coins and facilitating financial transactions.

What is one critical function of banks in the economy?

Facilitating the flow of funds to promote economic productivity.

How does banking enhance income equality?

By providing access to financial services for underserved populations.

What role do banks play in securing financing for international trade?

They assist businesses in accessing global markets through trade-related financial services.

According to Richard L. Scott, what is banking primarily about?

Managing deposits, extending credit, and creating money.

What is the significance of pooling resources in banking?

It allows for efficient allocation of funds within the economy.