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A depository institution and a financial inter mediary. As a financial intermediary, it is a facilitator of finance. Although thrifts (savings banks) played a vital role in the past, contemporary banks may be classified into three broad categories: (1) credit unions, (2) commercial banks, and (3) central banks.

Credit unions are banks that perform banking functions for private members. Commercial banks are open to the public, and they specialize in providing banking services to individuals and institutions or businesses. Central banks provide banking services to national governments and perform regulatory, supervisory, and administrative functions. They are generally responsible for the overall performance and stability of a financial system.

Credit unions and commercial banks perform an important function of transferring and creating money. They transfer money by collecting ...

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