Which are the roles of a bank? Check all that apply.

Which are the roles of a bank? Check all that apply.

a. Storing and holding money

b. Making purchases to create profits

c. Lending money

d. Investing in the economy

e. Creating money for the economy

Answer: The correct options are a, c, d and e.

For this reason, a number of functions that revolve around the banking sectors in the financial system and the economy in general can be attributed to several important roles as highlighted in the following subtopics. They serve as safe custody banks and receive and keep money for people and corporations. Furthermore, through loans and credit instruments, banks help support the business and investments nurture economic initiatives. Banks also accumulate funds in the economy with the purchase of different financial securities and are involved in offering capital and enhancing the economy. Moreover, the method of fractional reserve banking makes the creation of credits or other forms of monetary assets for the economy through issuing loans and managing currency circulation. Option b, “Making purchases to create profits,” is not the major function of a bank since its role is to provide financial intermediation rather than engaging in purchase motive to directly create profits.