BANKING AFFAIRS

Detailed explanation-1: -The bank’s main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits.

Detailed explanation-2: -Ultimate means of settlement The central bank’s balance sheet is important as its main liabilities-banknotes and commercial bank reserves-are both a form of money in a modern economy and in fact underpin nearly all other forms of money.

Detailed explanation-3: -Liabilities of a commercial bank One of the main and first items that can be found on the liabilities side is the bank’s share capital. These is money owed to the bank’s shareholders. Another very important item that you will always find on a bank’s balance sheet is checkable deposits.

Detailed explanation-4: -Commercial banks are the most important components of the whole banking system. A commercial bank is a profit-based financial institution that grants loans, accepts deposits, and offers other financial services, such as overdraft facilities and electronic transfer of funds.