Banking

Banking is defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to conduct economic activities such as making profit or simply covering operating expenses.

The financial intermediation theory of banking. ... In the words of recent authors, “Banks create liquidity by borrowing short and lending long” (Dewatripont, Rochet, & Tirole, 2010), meaning that banks borrow from depositors with short maturities and lend to borrowers at longer maturities.