Importance of Banks in an Economy

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The desire to accumulate wealth is very high on most individuals whether currently rich or not. People struggle on ways of raising capital to finance their businesses and other development projects. The ability to access credit facilities from established financial institutions is very beneficial to any economy. However this must be done in a controlled manner since such expenditures involve a lot of money which may exceed the optimal level thus having negative effects on the economy in form of inflation. There are many benefits that the economy derives from banks in Houston TX. The banking sector is highly regulated by numerous laws since it is one of the major tools of implementing monetary policy by the government. The sector provides many employment opportunities for members of society to apply for. The income from employment as a banker is used by these individuals in other revenue generating activities. The result is an economy which is balanced since many people from different specializations benefit directly or indirectly from such employment opportunities. People want to keep some money aside for future use. This is called saving. Banks mobilize savings from the members of public and invest that money since many people contribute to the kitty thus making the value of such investments very high. The returns from such huge investments are by far higher than those from smaller amounts. They provide credit facilities too to employees, the public and businesses. The Federal Reserve Bank is the banker to the government and also provides loans to the government. These are internal borrowings done by the government to finance the annual budget. The Bank of America is also the currency issuing authority. All kinds of currency are under the control of the Federal Reserve Bank. In addition the responsibility of implementing various monetary policies and

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