Social Sciences and History / Unit 14 SSH 1329 short lesson, about 20 seconds
The Bank's T-Account
Captions available
The idea
Banks are financial intermediaries between savers and borrowers. A balance sheet, or T-account, lists assets and liabilities: a bank's liabilities are its deposits; its assets are its loans, bonds, and reserves, which it does not lend. Net worth is assets minus liabilities.
In practice
Defaults or a time mismatch can sink net worth.
Where people slip
Diversifying and holding reserves reduce the risk.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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