Current state of the U.S banking industry Research Paper

Current state of the U.S banking industry - Research Paper Example It is also responsible for issuing the dollar (J. P. Morgan 12). Basically the US is dominated by three types of banks and these are; Commercial banks, credit unions and savings and loans associations. These institutions present a full variety of services to persons, companies and governments. Commercial banks vary in size ranging from global to local and even small society banks with ATM locations. lately, online banks which presents services by means of the internet have surfaced (J. P. Morgan 43). Are also referred to as thrift institutions, and are the next major faction of depository organizations. They were primarily established as society footed organizations to fund mortgages for the community. Eventually, the difference linking savings banks and commercial banks has vanished. Credit unions are another form of a depository organization. They are created by a group of persons who share a general interest. Loans and savings accounts are only limited to associates or members. They are not meant to make profit and they are headed by members who are elected as the board. These are government organizations dealing with numerous economic services like controlling banking business, making and applying the state’s monetary plans. They use monetary policies to encourage financial development and border inflation. During phases of slower financial activity, the Federal Reserve might augment the supply of money by buying government securities plus additional assets. It as well encourages financial enlargement by lowering interest costs for loans. It may fight inflation through sale of securities and increasing interest rates (Zhang 45). Interest from advances is the main cause of returns for the majority banks. Money loaned by banks comes mainly from customer plus company deposits. These deposits frequently make interest for the proprietor by ways such as online payments cheques. The U.S. government regulates the money in banks by