Banking, Finance and Real Estate
A bank is a financial intermediary and money creator that creates money by lending money to a borrower, this creates a corresponding deposit on the bank’s balance sheet. Lending activities can be performed by loaning directly or indirectly through capital markets. Due to their importance in the financial system and influence on national economies, banks are highly regulated in most countries. However, previously this regulation did not appear to be sufficient in some cases and this lack of regulation was arguably the cause of the Global Financial Crisis that occurred in 2008.
Most nations have institutionalized a system known as fractional reserve banking, central banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world. In the history of banking, a number of banking dynasties — notably, the Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds — have played a central role over many centuries. The oldest existing retail bank is Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.
Finance can be defined as the science of money management. Finance is a field that deals with the allocation of assets and liabilities over time under conditions of certainty and uncertainty. A key point in finance is the time value of money, which states that purchasing power of one unit of currency can vary over time. Finance aims to price assets based on their risk level and their expected rate of return. Finance can be broken into three different sub-categories: public finance, corporate finance and personal finance.
In English common law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it have been made by human efforts: buildings, machinery, wells, dams, ponds, mines, canals, roads, etc. Real property and personal property are the two main sub-units of property in English Common Law.
In countries with personal ownership of real property, civil law protects the status of real property in real-estate markets, where estate agents work in the market of buying and selling real estate. Scottish civil law calls real property “heritable property”, and in French-based law, it is called immobilier.