This essay focuses on specialized financial institutions.of which commercial banks are the oldest and most important. In present-day industrial economies, the banks are able to extend and increase the supply of credit. The creation of new deposits for their loan customers.
You will complete the below questions from the textbook: Chapter 13 Test (p. 243); Questions 2–6 Your full homework should be complete in detail within a Word document with all work used to complete the problem demonstrated in clear detail. All work must be present to receive full credit, and please label each question. APA is not a requirement for this assignment.
Most modern credit is extended through specialize financial institutions. Of which commercial banks are the oldest and most important. In present-day industrial economies. The banks are able to extend and increase the supply of credit by the creation of new deposits for their loan customers.
The lender must judge each loan he makes on the basis of the character of the borrower (his intention to repay. T his capacity to repay (based on his potential for earning income), and his collateral (property pledge in case of default on the loan). The terms of credit transactions may be publicly regulate to prevent abuses . All customers and lenders as well as to channel credit into particular sectors of the economy.
Public lending programs, often combine with public systems of savings collection. Provide a large portion of housing finance in many European and Asian countries. In the U.S. Public credit is frequently extende for housing, small business, and agriculture.
Commercial banks in both industrialize and less develope countries are often reluctant to extend agricultural credit because of the high risk involve. Such loans are usually made only to very large farms. In addition to government credit. Cooperative credit systems have been particularly important in less develop countries. Where they are often the only source of funds available to small farmers at reasonable rates of interest.
Transaction between two parties in which one supplies money, goods, services, or securities. In return for a promised future payment by the other (the debtor or borrower). Such transactions normally include the payment of interest to the lender. Credit may be extend by public or private institutions to finance business activities, agricultural operations, consumer expenditures, or government projects.