The text boxes in the left panel have been placed in a random order. Restore the original order by dragging the text boxes from the left panel to the right panel.
c) The ability to deploy invested funds into productive economic activity at a higher rate of return, hence contributing to the prosperity of both the economy and the institution, is the other loop in the banking cycle.
d) Further, as only a small portion of the actual deposit base is retained with the bank in a liquid form, the very survival of the bank lies in building enough trust with its clientele so as to prevent the occurrence of a sizeable chunk of simultaneous customer withdrawal (a run on the bank).
b) The ability to retain deposits, in itself, is not enough to ensure long-term survival and growth.
e) The bank's basic job is risk absorption- it takes money, which has a lot of attached risk, and provides the customer an assured rate of return.
a) Let us take a look at the manner in which the traditional bank adds value to the customer.