Greek Banks And Banking Law

Introduction

A bank is a financial institution which accepts sums of money as deposits and uses that sum to lend it to people, either through capital markets or directly. It basically connects customers with capital surpluses to those with capital deficits. Banks are highly regulated in most countries due to their status with the economy and the financial system. Fractional Reserve Bank Banking is the system under which most banks operate. They hold only a small reserve of funds deposited while lend out the rest as profit. Banks act as payment agents by paying checks drafted by the customers, checking on current accounts and collecting transferred or submitted checks by the customers. Banks have also made available paying for customers through other methods like ATM and Credit Cards. Banks also gives money to people by issuing loans which the customers have to pay back in installments, and also investing in markets which is another form of lending money. Bank accounts are considered to be indispensable by most individuals, businessmen as well as government. Companies such as remittance companies which provide non-bank payment services are not considered adequate for having a bank account. Most sums of money transferred and deposited in the banks are from either the households or businesses which are non-financial. 

History

Bank Banking was dominated in the 14^th century by the Barzi and Peruzzi families in Florence, establishing branches in many parts of Europe. Banks of St. George founded in 1407 at Genoa Italy is the earliest state deposit bank known. Florentine bankers used benches as an alternate to desks and covered them with green cloths at the time of Renaissance.

Features

Banking laws vary from country to country. Currently most commercial banks have to have a special bank license to operate and are regulated by government activities. In most countries central banks have the monopoly on the business of issuing notes. However, in countries like UK this is not the case. The Financial Services Authority licenses banks. Some Commercial banks like (Bank Of Scotland) in addition to bank notes issued by the  Bank Of England also issues their own bank notes. Bank banking laws are basically based on the relation between the customer and the bank. Lately Greek banks are having a hard time. Due to the fact that many Greeks are unemployed and are withdrawing money from their saving accounts which is resulting in an outflow of capital from the Greek banks to increase swiftly. This has had a disastrous effect on their economy. Also due to recession the Greek banks were more reluctant to lend money which in turn resulted in Greek locals to withdraw their money from banks and survive on their savings. Moreover, more Greeks now keep their savings in their homes as they are worried the banking system may crash.

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