Deposit banking in the United States has two main and distinct functions. Banks are of course a primary part of capital formation. This is because they are able to collect the savings of the people, and put these savings into long-term investments, giving people the chance to gain interest on their money.
Banks are ultimately responsible for what happens to peoples' money, and hence, they are not taking measures to ensure that the people can continue to put their trust in the banks and continue placing deposits. Without deposits the economy would pretty much collapse and the United States would once again face a collapse of the banking system. Only nationalization would fix this, but in the United States, it's incredibly unlikely for something like that to happen.
- The primary function
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Banks are ultimately responsible for what happens to peoples' money, and hence, they are not taking measures to ensure that the people can continue to put their trust in the banks and continue placing deposits. Without deposits the economy would pretty much collapse and the United States would once again face a collapse of the banking system. Only nationalization would fix this, but in the United States, it's incredibly unlikely for something like that to happen.