What is one of the key functions of commercial banks in the financial system?

Understand the Problem

The question is asking for an identification of a primary function of commercial banks within the financial system from a list of options provided.

Answer

Credit creation.

One key function of commercial banks in the financial system is credit creation.

Answer for screen readers

One key function of commercial banks in the financial system is credit creation.

More Information

Credit creation is vital as it facilitates lending and contributes to the overall economic growth by enabling businesses and individuals to access funds needed for expansion and consumption.

Tips

A common mistake is to focus only on deposit-taking or payment processing without acknowledging the role of credit creation as an economic driver.

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