A bank is a financial institution that accepts deposits and makes loans. It pays interest to depositors and charges interest to borrowers. The difference, called the spread, is how it earns money. Banks also provide payment services, issue cards, and manage investments. They are regulated because they hold the public's money and because failures can destabilize the economy.

Types vary. Commercial banks serve individuals and businesses. Investment banks help companies raise capital and trade securities. Central banks manage monetary policy and act as lenders of last resort. Credit unions are member-owned cooperatives. Online banks operate without branches. Each serves a different niche.

Banks are trusted institutions, but they fail. The 2008 financial crisis saw hundreds of banks collapse. Deposit insurance, like the FDIC in the United States, protects savers up to a limit. That protection prevents panics. Without it, a rumor could empty a bank in hours. Banking depends on confidence. When confidence breaks, the consequences spread fast. Regulation aims to keep that confidence intact.

Common services

• Checking and savings accounts
• Loans and mortgages
• Credit cards
• Wire transfers
• Investment products