A bank is a place to keep money. It's also a business. How does it work? Your money can be deposited or put into an account. The bank lends some of the money on deposit to people who need it. The bank makes money by charging a lending fee.
When banking first began in America, almost anyone could open a bank and print "bank notes". In fact, before the Federal Reserve System (the Fed)was founded, there were 30,000 different currencies in the United States.
The Federal Reserve System was established in 1913 to help banks become more efficient. The Fed supervises banking. it also controls the flow or supply of money so that there is always enough on hand to meet the public's demand.
The Fed distributes all the coin and paper money produced in the United States through 12 offices. Old money is returned to the Fed. Coins can be melted down to make new money. Paper money is shredded or burned.
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