Banks

Banks provide lending and liquidity. These are the primary roles of banks.

Banking itself is split into retail, commercial, corporate and investment banking. 

Commercial banks create most money in the economy. This lending is regulated via the prudential framework. They also borrow from the central bank.

Retail banks will offer mortgages and other consumer level lending services. These services also create money (ie when a loan is made new money is created).

Corporate banking refers to services to companies which can be small to very large companies. 

Investment banks work in the mergers and acquisitions field; sale of securities; and underwrite new securities.

RTGS is a means by which transactions are settled for commercial banks via the central bank where they have accounts.

 

” Whenever a bank makes a loan, it 
simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. “