The role of bank in the future

The Role of Bank in the Future

1 Introduction

In 2008 the financial crisis severely hit American financial system and federal economy and even its bad influence, like a flu, rapidly swept around the world, adversely affecting countries that had nothing to to with the causes (Roman and Júlia, 229-243). From this events, it can be concluded that the banking industry in modern times is working on an unprecedented change process and it should be taken more secure measures at many levels—by legislators, by regulators and certainly also by the banks themselves—on a more stable and less risky financial system (Rudiger and Antoine, 253-279). As the core social function of banks is attracting savings and deploying them in the real economy through investment and loans to consumers and businesses and more emphasis is put on tightening risk management. So some believe that the bank in the future will be performed under a financial system which contains the Social Charter, the Banking Code and the rules of conduct associated with the bankers' oath together. While there is another industry, the electronic business industry on the Internet risen silently with the power to influence everyone’s life style and, of course, the financial system (Payam, Byron and Hamid, 492-510).

2 Variation of bank’s rolefrom credit intermediary to infomediary

Banks are financial intermediaries responsible for the conversion of credit and term, so its role of credit intermediary is the basic role of bank and can essentially reflect operating characteristics of commercial banks. But the bank’s role of credit intermediary isn’t always invariable. With the wide application and popularization of

Internet technology and the steadily improvement of social credit environment construction, trades can be achieved through the Internet accompanying with accommodation of fund, which will drastically weaken the foundation of bank’s credit intermediary role. But banks are not the dinosaur and won’t disappear in the 21th century. Relying on huge datum, banks in the future will play the leading role in financing process. Its role may be changed from credit intermediary to infomediary. 2.1 Foundation of bank’s credit intermediary role

The bank is the production of the commodity economy when the economy develops into a certain stage. The traditional bank originated from the industry of currency exchange and storage. Institutions which was in charge of reversing currency, paying and receiving interest and issuing loans was found in Babylon temple as early as 2000 BC and the Greek temple in 500 BC. And then western European merchants made profits from money exchange services which derived lending business to get more profits. This was pronounced the birth of the modern bank.

The role of credit intermediary is the basic role of bank and can essentially reflect operating characteristics of commercial banks. Its essence is that banks collects various social idle funds through the liability business and invests their money to all sectors of society through the asset business. Economic history has proved that the banks as credit intermediaries adapt to the need of development of modern commodity economy, significantly expand the social credit scale and promote the development of capitalist mode’s production.