Banking and Financial Institutions Quiz

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A demand deposit is created when a bank accepts deposits from the public. What is a demand deposit?

A demand deposit is a deposit of money that can be withdrawn without prior notice, such as a checking account.

What is fractional-reserve banking and how does it work?

Fractional-reserve banking is a system in which banks hold only a portion of their current liabilities in liquid assets. They lend out the rest of the deposits to earn interest.

What are the Basel Accords and what do they do?

The Basel Accords are international standards that set minimum capital requirements for banks to ensure financial stability and manage risk.

When did banking in its modern sense evolve and in what region?

<p>Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy.</p> Signup and view all the answers

What is the role of banks in the economy of a country?

<p>Banks play an important role in financial stability and the economy of a country by accepting deposits and making loans, which stimulates economic growth and development.</p> Signup and view all the answers