1. Basic definition of reserve:
Reserve is the cash deposited by commercial banks in the central bank in proportion. The purpose of implementing reserve is to ensure that commercial banks can have sufficient solvency when they suddenly withdraw a large amount of bank deposits. The statutory reserve system has also become an important means for the state to regulate the economy.
2, the basic definition of securities:
Securities are the general name of all kinds of economic rights and interests certificates, and also refer to specialized products, which are legal certificates used to prove that the holder enjoys certain rights and interests.
Securities mainly include capital security, currency securities and commodity securities. In a narrow sense, securities mainly refer to securities products in the securities market, including property market products such as stocks, debt market products such as bonds, and derivative market products such as stock futures, options and interest rate futures.
3. The basic definition of loan:
Loan means that banks, credit cooperatives and other institutions lend money to units or individuals who use money, and generally agree on interest and repayment date. Loans in a broad sense refer to loans, discounts, overdrafts and other borrowing funds.
The basic definition and function of commercial banks;
1, basic definition:
Commercial bank, abbreviated as CB in English, is a kind of bank, which is a financial institution that undertakes credit intermediary through deposit, loan, remittance and savings. The main business scope is to absorb public deposits, issue loans and discount bills.
2. Function:
(1) Commercial banks can absorb all kinds of deposits and issue loans by creating credit circulation tools, which makes the creation of deposit currency play an increasingly important role in economic life.
Commercial banks can absorb all kinds of deposits and issue loans, convert deposits into loans and increase the sources of funds. (2) In the banking system, derivative deposits that are several times the original deposits are formed, and commercial banks create and shrink demand deposits through their own credit activities to meet the needs of social and economic development for liquidity and means of payment.
(3) Commercial banks have the function of credit creation, which can save cash use and circulation costs and meet the needs of social and economic development for communication and payment means.