Money and Banking Industry

By Bri Bradley

Money

-Money is a current medium of exchange in the form of coins and banknotes

-Three uses of money include medium of exchange, store of value, and measure of value

-The 6 characteristics of money include durability, portability, divisibility, uniformity, limited supply, and acceptability

-Sources of money's value include interest rates, faith in currency, and market liquidity

-The source of the value of money in the US is we believe we are getting the correct item or service for the correct currency

History of Banking

-The first bank of America was made so Alexander Hamilton could handle war debt

-When the Bank of 1811 lost its charter, banks started giving out too many bank notes which led to a panic

-The Federal Reserve System is the central banking system of the Untied States it was made by congress to provide the country with a safer financial system

-The FDIC is an independent agency of the United States federal government that preserves public confidence in the banking system by insuring deposits

Banking Today

-Economists measure money in two ways, the first includes currency, traveler checks, and checking account deposits. The second way includes savings accounts, time deposits, and money market mutual funds

-The current US money supply is $4,028,362

-The most common services banks supply is checking accounts, savings accounts, certificates of deposit, and loans including car loans and home mortgages

-Banks make money through interest on loans they give out

-Different types of financial institutions include depositary institutions, which are deposit-taking institutions. The other financial institution is Contractual institutions, which include insurance companies and pension funds

-Online banking has changed the world, in the fact that online banking makes banking easier and consumers can check their accounts at any time of the day