I will start with a standard definition of a “bank”, recalling the main functions that banks are supposed to perform and explaining why these functions are so important and special that they warrant relatively close public intervention and oversight. A bank is “an institution whose current operations consist in granting loans and receiving deposits from the public”.
2 This definition refers to the core activity of commercial banks, namely the simultaneous acceptance of deposits and offering of loans, which distinguishes them from other financial intermediaries. However, banks typically conduct a broader range of activities, which can be subsumed under the following three functions: 3 •  First, banks provide the public with liquidity (money) and payment services through their deposit-taking business.