In nine pages and two parts this paper discusses banking systems in terms of types, their roles, and fulfillment of these roles. Seven sources are listed in the bibliography.
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their role and actions depending on they type of bank that is being considered. Furthermore, many of the functions traditionally associated with banks may be fulfilled by other finical institutions,
for example current accounts, where there is the writing and cashing of cheques, as well as the taking in of deposits maybe conducted by building societies. The structure of the
banking industry is one where there are three main types of bank. At the top of the hierarchy is the central bank. Each country only has one central bank, for
the UK this is the Bank of England, should we join the single European Currency this will become the European Central Bank, with the Bank of England then playing subsidiary
role to the ECB. The central bank has several functions, they issue the money, and control the money supply, regulate the clearing services that are operated by the main
clearing banks, they are the governments banker, holding the government reserves, they set reserve ratios, and are the lender of last resort, this means that have the power to bail
out banks when the need arises. However, as we have seen with the collapse of Bearings bank this is not a power they will use where there has been fraud
or inappropriate actions. If we look at the Bank of England it was traditionally under the control of the government. When it
was national policy to use interest rates as a tool to control inflation the final decision as to whether or not interest rates would increase was seen as residing with
the government, and not the bank. Therefore the bank was in many ways merely a subsidiary department of the government. It was only in 1997 that the Bank of