"Bank:
= institution that deals with money and provide financial services
Profits of banks consists of:
a) the differents between the interest on loan and the interest paid on deposit
b) payments for bank services

Money:
= anything generally excepted as a means of paying for goods and services
They are:
a) medium of exchange (simplify transactions between buyers and sellers)
b) measure of values
c) store of values
Forms:
1. Currency – bank notes and coins (cash money)
2. Demand deposits – money in current and saving accounts – can be used at time
3. Term deposits – withdrawals are restricted to a specific time
4. Securities: Shares, bonds, bills of exchamge, cheques, certificates of deposits
• requiere you to leave money in the bank for a specific period
5. Payment cards

The Banking system
Two grades:
1. Central bank -> the Czech National bank
2. Commercial banks -> perform nearly all operations

The Czech National bank
= independent financial institution managed by governor – Miroslav Singer
role - > control amount of money in czech society to avoid inflation and recession
activities:
1. issues currency
2. buys and sells government securities
3. supervise and regulates commercial banks
4. is responsible for monetary policy
5. represents our country abroad
6. determines discount interest rates

Commercial banks
= profit making businesses that accept deposits and use these funds to provide loans
- usually joint stock companies – ČSOB, KB
Banks operations:
1. opening and managing accounts (current, deposit, foreign currency)
2. providing loans and mortgages
3. issuing payment cards, arranging electronic money transfers, standing payment orders, handling echeques and bills of exchange
4. exchanging foreign currency, providing information to clients
Types of accounts:
a) current accounts
• low interest, owners usually get Account Statement
• for writing echeques, paying by debit card and paying bills
b) deposit accounts and saving accounts
• long-term deposits usually earn higher interest than short-term deposit
• we have to give a notice to bank in advance if we want to withdraw money
Loans:
= money lent to a borrower by a lander, borrower must pay off his loan and the interest on the sum
a) long-term loans (10 to 20 yrs)
b) medium-term loans (5 or 6 yrs)
c) short-term loans (6 months to 3 yrs)"